U.S. electric car maker Tesla cut the starting price of its Chinese-made Model 3 sedans on Thursday by about 8% to 249,900 yuan ($36,805), once Chinese subsidies for electric vehicles are taken into consideration, according to its China website.

Previously, after state purchase subsidies, the starting price for Model 3 sedans made in Tesla’s Shanghai factory with a standard driving range was 271,550 yuan.

The standard range Model 3 sedans would now come with lithium iron phosphate (LFP) batteries which are cheaper than the nickel-cobalt-manganese (NMC) cells it used previously, sources told Reuters.

Tesla did not reveal what batteries the cheaper version uses.

Down from 344,050 yuan, the price for Model 3 vehicles with a longer range is now 309,900 yuan.

Tesla started to deliver cars from the Shanghai factory, helping it save on shipping costs and tariffs for imported models.

The world’s biggest car market Tesla sold more than 11,000 vehicles, mostly Model 3s, in August in China.

It is also building a new car manufacturing capacity for Model Y sports-utility vehicles in Shanghai and expects to start delivering them from next year.

Read More: Warren Buffett-backed Chinese car maker announces strong demand for its new luxury electric sedan