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Tesla's Aug China-made EV sales drop 4% on year

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But sales of Models 3, Y surge on month in August

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China market performance rocky this year

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BEIJING, Sept 2 (Reuters) - Tesla's China-made

electric vehicle sales dropped 4% in August from a year earlier,

following an 8.4% fall in July, as the U.S. automaker refreshed

its aging lineup in China's hyper-competitive market.

However, deliveries of Model 3 and Model Y vehicles made at

Tesla's Shanghai factory, including exports to Europe and other

markets, surged 22.6% from July to 83,192 units last month, data

from the China Passenger Car Association showed on Tuesday.

Top Chinese rival BYD extended a sales

decline in its home market, which accounts for nearly 80% of its

global shipments, for a fourth straight month in August.

Amid intense competition and a backlash against Elon Musk's

politics, Tesla's sales across Europe plunged 40.2% in July on

the year and trailed BYD, despite an overall EV sales rise in

the continent.

In China, Tesla's second-largest market after the U.S. in

the second quarter in sales terms, the EV specialist launched a

refreshed version of its best-selling Model Y in January. But

its China sales performance has been rocky this year, recording

lower deliveries in the first seven months versus last year.

To fire up sales, Tesla lowered the price for Model 3

rear-wheel drive with a range of 830 kilometres (516 miles) by

3.7% in China on Monday, less than a month after its China

launch.

It began first deliveries of its new six-seater Model Y L

with a starting price of 339,000 yuan on Tuesday.

The new SUV with a longer wheelbase than its best-selling

Model Y is 2.7% more expensive than the highest-end version of

Xiaomi's ( XIACF ) YU7 SUV.

Garnering over 240,000 locked-in orders in less than a day

after the YU7 went on sale in late June, Xiaomi's ( XIACF ) first SUV is

seen as the biggest challenger to the Model Y after its SU7

sedan outsold the Model 3 in China on a monthly basis since

December.