Tesla is launching interest-free loans for a limited time in China as a new incentive as the automaker loses market share in a key market.
Just as the quarter-end incentives ended, Tesla is already introducing new incentives in China, its most important market.
China is the world's largest automobile and EV market.
Tesla has some problems in the market. Tesla's market share fell from 10.5% to about 6.7% through 2023, according to data from the China Passenger Vehicle Association via Bloomberg.
2024 hasn't gotten off to a great start, as Tesla reported its first quarter results yesterday, confirming that global vehicle deliveries fell for the first time in years.
Now, Tesla is looking to gain traction in China by introducing a new limited-time zero-interest loan program.
This applies to both Model 3 and Model Y. However, it requires a hefty down payment of 79,900 yuan (approximately $11,000 USD).
The new initiative comes after the People's Bank of China and NFRA announced that they would let financial institutions determine the “maximum disbursement ratio for own use of new energy vehicle or fuel vehicle loans.”
Electrek's view
It will be interesting to see how much of an impact this new initiative will have. This has been made possible by the financial authorities, so I think other companies will soon follow suit.
Tesla CEO Elon Musk has frequently used high interest rates as an excuse for Tesla's demand problems, but competition is also an issue, especially in China.
If this doesn't turn things around for Tesla in China in the second quarter, they can no longer use high interest rates as an excuse. I hope it'll go well.
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