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by Scott Kanowsky

Tesla (NASDAQ:TSLA) has announced its second price cut in China in three days, further fueling worries of a potential price war in the country’s lucrative electric vehicle (EV) market.

The Elon Musk-led EV giant lowered the price of its Model X sport utility vehicles and Model S sedans in inventory by as much as CNY 70,000 (CNY 1 = $0.1371), a statement on the company’s WeChat account read.

Shares in Tesla slipped in premarket U.S. trading on Wednesday.

On Monday, Tesla slashed prices for its Model Y long-range and performance editions in China by CNY 14,000, reinvigorating concerns that the firm’s rivals in the world’s biggest auto market will also be persuaded to roll out similar moves.

Tesla has been racing to secure its share of a fiercely competitive Chinese market. The firm’s shipments in the country slipped by 31% in July, touching their lowest level this year, while global production is expected to fall in the third quarter.

Evercore ISI analysts predicted in a research note that comparable targeted price reductions might be seen in the U.S. and Europe.

During a call with analysts last month, Musk suggested that his company would continue to reduce prices as it has done throughout 2023, even if it takes a toll on profit margins. He argued the value of Tesla models will increase once its autonomous driving program is perfected.