A day after China delivered on its promise to cut auto import tariffs, Tesla Inc. lowered prices in the country by about 6 per cent, passing on some of the savings to consumers as competition heats up in the world’s largest electric-car market.

The price of a Model S has been reduced to as low as US$111,000 and the Model X is now as little as US$121,000, said a representative on Tesla’s sales hotline in China on Wednesday.

While carmakers including Porsche, BMW AG and Toyota Motor Corp. promised to adjust prices in China after the duty cut, Tesla is one of the first to implement a reduction. China’s Ministry of Finance said Tuesday the car import tariff will be lowered to 15 per cent effective July 1, from the current 25 per cent that has been in place for more than a decade. The government said the move is aimed at meeting demand by Chinese consumers.

New prices will apply to all cars that are yet to be delivered, according to a Tesla statement posted on the company’s WeChat account. A spokeswoman for Tesla China declined to comment on the prices.

The tariff cut is a boon for Tesla until it manages to set up local production. The company has been working with Shanghai’s government since last year to explore assembling cars in China. China has said it will allow foreign new-energy vehicle makers to fully own auto factories as early as this year, removing the primary hurdle for founder and billionaire Elon Musk.

The Palo Alto, California-based company adjusted the price range for its Model S sedans in mainland China to 710,000 yuan ($111,000) to 1.23 million yuan, from 758,000 yuan to 1.31 million yuan previously, according to the sales representative. The price range for the Model X SUV was lowered to 775,000 yuan to 1.31 million from 825,000 yuan to 1.41 million yuan.