Tesla cut electric car prices in China for the second time in less than three months on Friday, stoking expectations for a wider price war for battery-powered vehicles in the world’s largest auto market where demand has weakened.

Tesla also cut prices on its best-selling Model Y and Model 3 electric vehicles in Japan, South Korea and Australia.

The coordinated price cuts were part of an effort to help stoke demand for Tesla’s output at its Shanghai factory, the company’s single largest production hub, according to a person with direct knowledge of the plan. It was also the first major move by the electric vehicle maker since Tesla appointed its lead executive for China and Asia, Tom Zhu, who has been based in Shanghai, to

oversee global output and deliveries.

The latest cut in China, along with a price cut in October and incentives extended to Chinese buyers over the past three months, mean a 13 per cent to 24 per cent reduction in Tesla’s prices from September in its second-largest market after the United States, according to Reuters calculations.

On Friday, Tesla slashed prices for all versions of its Model 3 and Model Y cars in China by between 6 per cent to 13.5 per cent, according to Reuters calculations based on the prices shown on its website. The starting price for Model 3, for instance, was cut to 229,900 yuan ($33,427) from 265,900 yuan. It cut prices in Japan on the same day.

Grace Tao, Tesla’s vice president in charge of external communications in China, posted on her Weibo social media account on Friday that Tesla’s price cuts in China reflected engineering innovation and “answer the government’s call to promote economic development and encourage consumption.”

Deliveries of Tesla’s China-made cars hit their lowest in five months in December.

The cuts came just days after Beijing ended a subsidy programme that helped build the world’s largest EV market. Softening demand has forced Tesla and its rivals to absorb the brunt of that decision.