BEIJING (Reuters) -Tesla Inc said on Friday it has started selling China-made Model Y sport-utility vehicles (SUV) and will deliver them to customers this month, as the U.S. electric vehicle maker expands sales in the world's biggest car market.

China, which offers hefty subsidies for electric vehicles as it seeks to cut down on pollution from petrol or diesel cars, is key to Tesla's global strategy. It is expanding its Shanghai car factory, where it also builds its Model 3 sedans. In October, it started exporting Model 3 vehicles to Europe.

It is also adding manufacturing capacity for EV chargers in Shanghai and expanding its sales and service network around the country. It sold over 20,000 vehicles in November.

The starting price of a Model Y in China is now 339,900 yuan ($52,091.95), according to its China website.

Tesla's rivals in China include Volkswagen AG, BMW as well as local startups such as Nio Inc, Xpeng Inc, and Li Auto Inc, which all have electric SUV models. ($1=6.5250 Chinese yuan renminbi)

(Reporting by Yilei Sun and Brenda Goh: Editing by Neil Fullick)