XPeng (NYSE: XPEV) shares are edging lower again premarket Wednesday after it was reported on Tuesday that the company announced price cuts in China, following a similar move by Tesla.
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XPeng shares closed Tuesday’s session down 6.31%, while it has declined slightly premarket Wednesday, down 0.6%.
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Reuters reported that the Chinese electric vehicle maker announced the price cuts for some of its models on its WeChat account, adding that the move could result in a wider electric vehicle price war.
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The company reportedly reduced the starting prices for its pure electric P7 sedan to 209,900 yuan ($31,015), around 12.5% lower than previously.
It is also said to have cut prices for all versions of its P5 sedan and G3i sports-utility vehicles by around 10% to 13%, according to Reuters.
As demand in the electric vehicle market begins to wane, competition is heating up, heaping pressure on electric vehicle firms to cut prices in order to sustain sales volumes. However, many EV firms are still loss-making.
A spokesperson for XPeng is quoted as saying that the company hopes “to make intelligent vehicles more accessible to more people with more competitive prices.”
If car owners purchased vehicles before the price cut, XPeng is offering maintenance services for free as compensation.
Tesla has already slashed the prices of its Model 3 and Model Y cars in China, prompting concerns about demand from analysts.
Meanwhile, earlier this month, JPMorgan downgraded XPeng to Neutral from Overweight, reducing its price target on the stock to $9 from $11, telling investors in a research note that the reopening trade in autos is “playing out rapidly and could run out of steam in near term.”
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