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BEIJING (Reuters) – Tesla Inc (TSLA.O) has slashed up to $14,000 off its Model X in China after Beijing announced major tariff cuts for imported automobiles, a potential sales boost for the U.S. firm as the world’s largest auto market pivots towards electric cars.

FILE PHOTO: Visitors look at a Tesla Model S car at a Tesla showroom in Beijing, China January 29, 2014. REUTERS/Kim Kyung-Hoon/File Photo

The carmaker will lower prices of its Model S and Model X cars by just over 6 percent, a Beijing-based sales representative told Reuters on Wednesday.

China said on Tuesday it will cut import tariffs for automobiles to 15 percent from 25 percent, a fillip for premium car brands like Tesla and BMW (BMWG.DE) which import a significant number of vehicles.

Tesla said on Tuesday that any of its cars sold in China would be subject to adjusted prices, even before the tariff change comes into effect on July 1.

The price of a top-of-the range Model X will be cut to 1.3 million yuan ($203,830) but that remains well above the $140,000 cash price-tag before savings for the priciest version in the United States – Tesla’s Model X P100D.

The move by the California-based electric carmaker likely foreshadows wider price cuts for imported cars in China as foreign firms look to narrow a price gap with domestic rivals. Imports, however, only make up a fraction of the overall market and tend to be upper-end models.

Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, said price cuts by foreign premium brands will likely force them to adjust the price tag for vehicles they produce locally in China. This in turn will gradually impact the price of more affordable, mainstream cars – even local Chinese brands.

“With imminent price adjustments in the higher-end segment, that will over time lead to a pricing adjustment for the entire market,” Zhang said.

Other carmakers, including Japan’s Toyota Motor Corp (7203.T) and BMW, said after the tariff cut that they would look at adjusting their retail prices in China to provide competitive offers to consumers.

($1 = 6.3735 Chinese yuan)

Reporting By Norihiko Shirouzu; Editing by Adam Jourdan

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