Chinese rival, Li Auto, also cut prices for its models, including the L7, L8, L9 and the newly launched Mega SUV. Hong Kong-listed shares of Li Auto plummeted to an 11-month low Monday.

A revamped Model Y is expected to take on Li Auto's L8 and L9 large-size SUVs, which have won over thousands of rich families in mainland China. Tesla is going on the offensive in mainland China ...