Tesla had launched a 0 down payment option in November 2021, but canceled it after just 3 days due to a surge in orders.
(Image credit: CnEVPost)
Tesla (NASDAQ: TSLA) has launched a 0 down payment option for car purchases in China as part of an effort to boost sales.
Customers who buy already-produced vehicles of the Model 3 and Model Y before June 30 can take advantage of the 0 down payment program, the US electric vehicle (EV) maker announced today on Weibo.
The incentive only applies to already-produced vehicles and show cars, not to customized vehicles.
For already-produced Model 3 vehicles, Chinese customers can enjoy 0 down payment as well as favorable interest rates, according to Tesla.
Customers buying a Model 3 can get an annualized fee as low as 2.5 percent, which translates to an annualized interest rate starting at 4.58 percent, according to a Tesla poster.
For the Model Y, in addition to the 0 down payment program, customers can also take advantage of a 0 percent interest loan after making a down payment of at least RMB 79,900.
Tesla launched a 0-interest loan offer in China on April 3, covering both the Model 3 and Model Y. Today's latest offer means that the 0-interest loan offer for the Model 3 has been removed.
Tesla last introduced a 0 down payment option in China in November 2021, but it was quickly canceled at that time.
On November 1, 2021, Tesla's China website launched a new financial product that allows consumers to purchase vehicles through a zero-down payment finance lease model.
If a consumer planned to purchase a Model Y standard range edition, which was priced at RMB 276,000 ($43,100) at the time, the down payment under the program was zero, and the monthly payment was RMB 5,520 based on a five-year installment loan.
The actual cost of the vehicle to the consumer was RMB 331,200, which was RMB 55,200 more than the original price of the vehicle, implying a 4 percent interest rate per annum.
Notably, on November 4, 2021, Tesla canceled the 0 down payment option, and the minimum down payment percentage was increased to 10 percent.
The reason for canceling the option was a surge in orders, making vehicle deliveries longer, local media reports quoted Tesla as saying at the time.
Tesla is now facing a very different market environment in China than it did then, with countless competitors.
On April 21, Tesla lowered the prices of all its models in China to cope with the intensifying competition.
The locally produced Model 3 and Model Y now start at RMB 231,900 and RMB 249,900, respectively.
Tesla sold 132,420 units in China -- its second-largest market after the US -- in the first quarter, contributing 34.23 percent of global deliveries, according to data compiled by CnEVPost. That's a 3.64 percent decrease year-on-year and a 22.08 percent decrease from the fourth quarter of 2023.
In March, Tesla sold 62,398 vehicles in China, up 107.02 percent from 30,141 in February, though down 18.61 percent from 76,663 a year earlier.
Its Shanghai plant exported 26,666 vehicles in March, down 11.77 percent from 30,224 in February while up 118.47 percent from 12,206 in the same month last year.
($1 = RMB 7.2448)
