Tesla has introduced 0% Annual Percentage Rate (APR) financing for new Model Y purchases in China, indicating efforts to stimulate demand in a competitive electric vehicle (EV) market. This move comes amid increasing competition from local manufacturers, notably Xiaomi, whose SU7 electric sedan has recently surpassed Tesla’s Model 3 in sales.
In response to these market dynamics, Tesla is also developing a more affordable version of the Model Y in China, aiming to reduce production costs by 20-30%. This strategy seeks to regain market share lost to local competitors offering feature-rich, cost-effective EVs.
Additionally, Tesla has raised the price of the Model Y Long Range by RMB 10,000 ($1,380) to RMB 313,500, while maintaining the price of the entry-level Rear-Wheel Drive (RWD) variant at RMB 263,500. To further attract buyers, Tesla is offering 0% financing for up to three years on the RWD model for purchases made between March 18 and April 30, 2025.
Weakening Demand Pushes Tesla to Offer Aggressive Incentives
These initiatives reflect Tesla’s strategic adjustments to bolster its position in China’s rapidly evolving EV market, where local brands like Xiaomi are making significant inroads.
Tesla has reintroduced 0% interest loans for the base Model Y in China, signaling potential challenges in maintaining demand. This offer includes up to three-year loans at 0% interest with a 30% down payment, available from March 18 to April 30, 2025.
Despite a recent RMB 10,000 ($1,380) price increase for the Model Y Long Range variant, the entry-level Model Y Rear Wheel Drive (RWD) price remains unchanged at RMB 263,500. The majority of Model Y sales in China are attributed to the RWD version.
Tesla’s current delivery timelines in China are 2-4 weeks for new Model Y RWD orders and 6-10 weeks for the Long Range AWD variant.
These developments occur amid intensifying competition in China’s electric vehicle market, with rivals like Xiaomi’s SU7 surpassing Tesla’s Model 3 in sales. The SU7 boasts a 31-34 week order backlog, compared to Tesla’s 1-3 weeks for the Model 3.
