Hong Kong, China, 13 Sept 2022, A red Tesla car passes in front of a Tesla dealership in Wanchai. (Photo by Marc Fernandes/NurPhoto via Getty Images)

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Tesla’s Chinese suppliers jumped after the electric automaker slashed prices for some models in China.

In a weibo postthe company said its Model 3 and Model Y vehicles in China would now be priced at 229,900 yuan (about $33,374) and 259,900 yuan, respectively.

The latest prices represent a drop of 13% to 24% from four months ago, according to Reuters calculations,

Shenzhen-listed shares of Tesla’s Chinese suppliers rallied on optimism the price cut could boost demand.

Shares of Anhui Shiny Electronic Technology closed 8.8% higher and Hengdian Group DMEGC Magnetics gained nearly 9%. Zhejiang Chint Electrics closed 7.92% higher and Shandong Jinjing Science & Tech rose more than 6%.

Tesla previously cut prices in China in late October in a bid to prop up sales and its competitive edge against rivals including BYDwhich recently unveiled To install luxury models.

Read more about electric vehicles from CNBC Pro

Grace Tao, a Tesla vice president of external affairs in China, said in a weibo post that the latest price adjustments were meant to boost demand.

The moves “respond to the government’s call with practical actions to promote economic development and encourage consumption,” Tao wrote.

Separately, the China Passenger Car Association reported on Thursday that Tesla’s December sales of China-made cars fell to 55,796, the lowest in five months.

— CNBC’s Evelyn Cheng contributed to this report.

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