Tesla shut down the first store it ever opened in China last week at the high-end Parkview Green shopping center in Beijing.
Reuters reports that sources within the company attributed the closure to cutting down on costs. Tesla confirmed that the showroom had been relocated to another mall called Raffles City.
The new location may have been more attractive to Tesla because of its more compact proportions. Its former flagship store at Parkview Green was two stories tall, and doubtless came with higher rent.
Read: Tesla Cuts Vehicle Prices In China Prompting Shares To Slide By As Much As 7%
Mall staff further confirmed that Tesla had shut down the showroom late last week, saying the automaker had opted not to renew its lease. First opened in 2013, the store was renovated and expanded in 2018 and would become the flagship location in Tesla’s second-largest market after the U.S.
The move comes shortly after Tesla lowered prices for its Model 3 and Model Y in China. That decision reversed a trend among EV manufacturers of growing prices and was the first hint of what analysts warned might become a pricing war in the market.
Tesla owns and operates 200 showrooms across China that display models and arrange test drives. More than half of the locations (including the recently closed Parkview Green store) do not offer any form of servicing for vehicles, something Tesla is trying to change.
With a plan to put an emphasis on lower-cost suburban locations that can provide repairs for owners, the automaker is attempting to meet CEO Elon Musk’s goal of improving service for customers. There are currently 305 openings for service jobs on Tesla’s recruitment website.
Tesla sales in the world’s largest EV market are up 55 percent in the first nine months of 2022, according the to China Passenger Car Association. However, the wider market for EVs and hybrids is up by 113.2 percent compared to the same period in 2021.