Tesla has lost share to Chinese competitors, while Elon Musk’s political activities have led to steep declines in Tesla sales in Europe.

Tesla will make a lower-cost version of its best-selling Model Y in Shanghai, three people with knowledge of the matter said, aiming to regain ground lost during a price war in its second-largest market.

Tesla has plans to produce a low-cost version of its best-selling Model Y to boost sluggish sales in China, according to a report. The car will cost at least 20% less to produce than the version launched last year,