Tesla will make a lower-cost version of its best-selling Model Y in Shanghai, three people with knowledge of the matter said, aiming to regain ground lost during a price war in its second-largest market.

In a bid to regain market share in China, Tesla (NASDAQ:TSLA) is reportedly developing a lower-cost version of its best-selling Model Y in Shanghai. Citing people with knowledge of the matter, Reuters reported that the new model will be more compact and at least 20% cheaper to manufacture than the refreshed Model Y,

Tesla will launch a stripped-down Model Y as its first "affordable" electric vehicle, according to a Chinese media report Thursday, while Reuters had a slightly different take Friday. Tesla stock rose slightly Friday after falling Thursday amid general market weakness.

US President Donald Trump purchased a red Tesla Model S Plaid to support Elon Musk. The car features a top speed of 200 mph, 0-60 mph in 1.9 seconds, a 17-inch touchscreen, a 22-speaker audio system,

In front of the White House as he looked over the Tesla vehicles, President Trump said he would not be allowed to drive his new car.

Markets are losing faith in Trump's administration amid escalating trade wars and government cost-cutting that might be doing more harm than good.