Last week, Chinese electric car maker BYD urged domestic players to wage war on Western rivals and “demolish” their competition.
BYD, which is backed by Warren Buffett, overtook Tesla as the world’s top electric car maker including plug-in hybrids last year.
Evidence of an escalating price war in the world’s biggest car market has worried investors. Tesla shares dropped almost 2pc in US pre-market trading, while BYD fell 9pc in Hong Kong.
Demand for electric cars in China has flagged since Beijing paused generous incentives last year, leaving manufacturers squabbling for sales in a smaller market.
Tesla has knocked 14,000 yuan (£1,520)off the price of its Model Y Long Range and Performance version in its latest round of price cuts, with the vehicles now priced at 299,000 yuan (£32,500) and 349,900 (£38,000) respectively.
The electric car maker has also extended an offer on discounted insurance for its Model 3 Sedan until the end of the month, a perk worth 8,000 yuan (£870).
