Tesla is extending its zero-interest incentives for buyers to defend its market share in mainland China and mitigate a slump in worldwide sales, days after being forced to halt orders for imported electric vehicles (EVs) amid a US-China tariff war.
The EV maker will allow consumers to stretch their loan repayment on Model Y SUVs to five years, it said on Tuesday. The sweetened offer, against the current three-year repayment terms, would be available until the end of June, it added.
Buyers could choose an interest-free loan to buy the SUV with a 79,900 yuan (US$10,930) down payment and 3,060 yuan in monthly instalments over five years, it said. The other option involves a 45,900 yuan down payment and 3,718 yuan monthly instalments at 0.98 per cent interest annually over five years.
The SUV is priced between 263,500 and 313,500 yuan, depending on the specifications.
“Tesla has seen a significant decline in sales across multiple regions,” said Shen Meng, director at Chanson & Co, a Beijing-based investment bank. “Combined with the impact of tariffs, its performance expectations have weakened, leading to a substantial drop in its stock price.”
Tesla’s shares have slumped 47 per cent in New York since President Donald Trump returned to the White House for a second term on January 20, according to Bloomberg data, while the Nasdaq Composite Index has lost 19 per cent. The stock lost US$637 billion in value in that sell-off.
Besides cutthroat competition among EV makers in China, the Austin, Texas-based EV maker is also facing a backlash in key European markets as CEO Elon Musk’s political leanings turned off buyers.
Quarterly sales plunged 41 per cent in France, 55 per cent in Sweden, 55 per cent in Denmark and 49 per cent in the Netherlands, according to company data. Tesla delivered 78,828 China-made EVs in March, an 11 per cent slide from a year earlier, according to industry data.
“The Chinese market is a top priority, so Tesla has introduced new promotional measures, not only to strengthen its competitiveness but also to balance the impact on global markets,” Shen said.
Tesla’s latest move comes as competition escalates with local EV makers including BYD, which snatched Tesla’s crown as the world’s top-selling EV maker last year. Since then, many new entrants, including smartphone maker Xiaomi and tech giant Huawei Technologies, have also entered the fray.
To retain customers in the mainland market, Tesla is also planning to make a lower-cost version of the bestselling Model Y in Shanghai by using existing production lines, with mass production slated for 2026, Reuters reported last month.
