Tesla Inc has announced that it will reduce the prices of its Model Y long-range and performance versions in China starting from Aug. 14, according to a notice posted on its website on Monday.

The electric car maker said it will lower the starting prices of both models by 14,000 yuan ($1,934.58), which represents a 4.5% drop for the Model Y Long Range and a 3.8% drop for the Model Y Performance. The new prices are 299,900 yuan and 349,900 yuan respectively.

Tesla also said it will offer insurance subsidies of 8,000 yuan for buyers of the entry-level, rear-wheel-drive versions of the Model 3 inventory vehicle between Aug. 14 and Sept. 30.

The price cuts come as Tesla faces increasing competition and economic uncertainty in China, its second-largest market after the United States. Last month, Tesla CEO Elon Musk said that further price reductions were possible, even if they squeezed the company’s margins.

Tesla has slashed prices several times in the United States, China and other markets since late last year, and increased discounts and other incentives to reduce inventory and boost sales.

However, Tesla’s sales of China-made vehicles fell 31% in July from June, data from China Passenger Car Association (CPCA) showed earlier this month. It was the first month-on-month decline since December for Tesla, which has been facing public scrutiny and regulatory pressure over its customer service, data security and vehicle safety issues in China.

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