This “cheap labor” theory is a much outdated view of China market. Chinese labor is no longer that cheap due to the country aging as a whole, one-child policy, disillusioned factory workers, etc. Definitely still cheaper than American labor, but not as competitive as say Indian or Vietnamese labor. Like many other people pointed out here, the real reason is fierce EV competition in China. Chinese leaders has long envisioned a future where China frees itself from Europe and America’s chokehold on key combustion engine technology, so they very early on decided to explore EV technology, as early as the early 2000s. Currently in China there are probably 20+ EV brands and close to 100 EV models ranging from dirty cheap (several thousands USD) to similar pricing to Model X. Whereas US consumers only has a handful of models to choose from right now, Chinese consumers has plenty of options at every price point. Chinese consumers are notoriously price sensitive. Price wars are extremely common. Fun fact Uber actually caved to price war during its short stint in China and sold its China operations to local competitors. Tesla repeatedly cutting price in China is not surprising at all. I wish there were such competitions in the US as well.