Tesla Model Y L. Credit: Tesla
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Like in other countries, and like other companies in China, Tesla has seen its sales drop in the largest EV market in the world this year. Tesla’s sales were down 10% year over year there in April, and they were down 15% across the first 4 months of the year. In an effort to reverse the trend, the US company is offering especially appealing loans and slashing down payment requirements for people who agree to a 5-year loan.
For example, a Tesla Model 3 there starts at 235,500 yuan ($34,580), and the required down payment is going from 79,900 yuan ($11,730) to 55,900 yuan ($8,210) if you take the Tesla-provided 5-year loan. That’s a decent cut in order to try to get more buyers, but it’s not really a discount, so who knows how much it will help?
The bigger help, in theory, is that the loan from Tesla is supposed to be a much better deal than a normal loan. “The five-year loan offered by Tesla, with an annualised interest rate of 0.99 per cent, costs 2,193 yuan monthly and ends with a 45,500 yuan final payment at the end of the five-year period,” the South China Morning Post writes. “Tesla said the new financing incentive could save a consumer 26,000 yuan in interest compared with a conventional loan.” A normal auto loan reportedly comes with at least a 3% interest rate per year. This is basically the same thing Tesla has been doing in the US — subsidizing loans and leases to try to make buying a Tesla more appealing.
