Tesla Introduces 0% Financing for Model Y in China as Demand Drops

Tesla offers 0% interest loans on Model Y in China due to slowing demand and rising competition from Xiaomi SU7 and BYD. Learn how China’s EV market is shifting.

Tesla has rolled out aggressive new financing terms for its refreshed Model Y in China—offering 0% interest for up to three years on the rear-wheel-drive version. The deal, launched on March 18 and running through April 30, signals a clear shift in Tesla’s strategy as demand for the updated model softens under mounting competitive pressure.

Model Y has long been Tesla’s best-selling model in China, with over 480,000 units sold in 2024. However, early 2025 figures indicate increasing challenges for the American automaker. Xiaomi’s debut EV, the SU7 sedan, has rapidly gained traction, surpassing Tesla’s Model 3 in sales. Reports indicate that Xiaomi secured over 248,000 pre-orders for the SU7, a model that boasts up to 830 km of range and a 0-100 km/h acceleration time of just 2.78 seconds in its top trim, starting at $29,870.

Adding to Tesla’s concerns, its China sales have shown signs of slowing. While specific figures for January 2025 remain unverified, industry trends suggest a downturn, with increased competition from domestic brands such as BYD and NIO. Meanwhile, the Chinese EV market continues to grow, with an overall increase of 40% in the first months of the year. Tesla ended 2024 with a 10.4% market share, while BYD maintained its dominance with 1.76 million EV sales last year. Xiaomi’s rise further intensifies the competitive landscape, as both NIO and BYD prepare new model launches in 2025.

Against this backdrop, Tesla’s 0% financing offer appears more like a strategic necessity than a gesture of generosity. The company has also raised the price of its Long Range Model Y by $1,380, which may indicate that demand for premium versions remains relatively stable.

The battle for China’s EV market is heating up. With slowing Tesla sales, surging competitors, and new models entering the market, the coming months will be a critical test of whether Tesla can hold its ground in one of the world’s most dynamic automotive sectors.

Source: electrek.co