The Tesla Inc. Model 3 vehicle is displayed during AutoMobility LA ahead of the Los Angeles Auto Show. (Photographer: Patrick T. Fallon/Bloomberg)

Tesla Lowers Car Prices in China After Trade War Hits Demand

(Bloomberg) -- Tesla Inc. lowered the prices of the Model S and Model X in China, seeking to boost sales after the trade war with the U.S. hit demand in the world’s biggest car market.

Prices for the models were lowered by 12 percent to 26 percent, the company said in a statement Thursday. The Model S sedan now starts at 782,900 yuan ($113,000) while the Model X sport utility vehicle is priced from 861,800 yuan, according to its website.

Tesla said it decided to absorb a “significant” part of the tariffs that China charges on cars imported from the U.S. to make its vehicles more affordable. China boosted the duty on American vehicles to 40 percent in July as part of a tit-for-tat trade war.

The tariff has had an impact on Tesla’s sales in China, the company said when reporting third-quarter earnings in October. The electric-car maker is working on plans to start a partial production of its Model 3 vehicle in China next year, Chief Executive Officer Elon Musk said on the company’s earnings call.

Tesla also said a dual-motor all-wheel drive version of its Model 3 will be priced at 540,000 yuan in China, and the performance version will cost 595,000 yuan.

©2018 Bloomberg L.P.