Tesla is launching 0% interest loans for a limited time in China as a new incentive amid the automaker losing market shares in the critical market.
Just as end-of-quarter incentives ended, Tesla is already bringing new incentives in place in its most important market: China.
China is the world’s biggest auto market and EV market.
Tesla has been having some issues in the market. According to data from China’s Passenger Car Association via Bloomberg, Tesla’s market share dropped from 10.5% to around 6.7% throughout 2023.
2024 didn’t start much better as Tesla reported its Q1 results yesterday – confirming that global deliveries shrunk for the first time in years.
Now, Tesla is looking to get some momentum in China by introducing a new limited-time 0% interest loan program:
It applies to both Model 3 and Model Y. However, it requires a significant 79,900 yuan (~$11,000 USD) down payment.
This new initiative comes after China’s PBOC and NFRA announced that they will let financial institutions determine the “maximum disbursement ratio for the self-use of new energy vehicle or fuel vehicle loans.”
Electrek’s Take
It will be interesting to see how impactful this new initiative will be. I assume others will quickly follow since it has been made possible by the financial authorities.
Tesla CEO Elon Musk has often used the high-interest rates as an excuse for Tesla’s demand issues, but competition has also been issue, especially in China.
If this can’t turn things around for Tesla in China in Q2, you can’t use high-interest rates as an excuse anymore. I hope it works.