Tesla offers loans in China as it looks to widen pool of buyers amid keen demand for electric cars
- Some of Tesla’s loan products require zero down payment and can be repaid over five years
- Tesla’s sales in September jumped 394 per cent year on year to more than 56,000 units, according to the China Passenger Car Association
The carmaker’s financial products, including some that require zero down payment, are aimed at making its Shanghai-made Model 3 and Model Y vehicles more affordable to Chinese consumers amid an accelerated pace of electrification on the roads.
Buyers who opt for a 276,000 yuan (US$43,150) standard range Model Y on a zero down payment plan need to pay a monthly instalment of 5,520 yuan over five years. They will end up paying 331,200 yuan in total over five years, which works out to an annualised interest rate of 4 per cent, according to a Tesla statement posted on the microblogging site Weibo.
On the mainland, a carmaker cannot offer financing services unless it obtains the banking regulator’s approval. In China people used to save cash for years before buying a car. It was not until 2014 that an increasing number of mainlanders, particularly those aged between 20 and 40, started using financing services to buy a car.
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A sales manager at Tesla’s HKRI Taikoo Hui showroom in Shanghai told the South China Morning Post on Tuesday that some customers were keen on knowing the finer details of the financing plans to buy the cars.
“Car loans have been well received by young drivers in China over the past few years,” said Steve Shi, a manager with Juchen Auto Trade, a car servicing firm. “Tesla’s auto loan business is set to fuel its business growth in China.”
Tesla also has other loan options. Consumers can choose a one-year term with a 50 per cent down payment. They can also opt for three or five-year terms, which require a down payment of at least 20 per cent.
Tesla, which dominates the premium EV segment in China, sold 56,006 units in September, a 394 per cent year-on-year increase and a rise of 26.5 per cent from August, according to data from the China Passenger Car Association. Tesla does not release its monthly sales figures in China.
The US carmaker began delivering the Model 3 sedans assembled at the Shanghai Gigafactory 3 in December 2019 and followed it up with the Model Y this year.
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Shanghai-based NIO delivered 3,667 vehicles last month, a decline of 27 per cent on year.
Beijing-headquartered Li Auto delivered 7,649 vehicles in October, an increase of 107 per cent year on year. But the sales were 19 per cent lower than its record of 9,433 units set in August.
