Tesla Launches Limited-Time Car Insurance Subsidy for Model 3 In China, Researcher Expects It To Have 'Limited Impact' On EV Maker's Delivery Hardships In Q1

EV giant Tesla Inc. TSLA has launched a limited-time insurance subsidy of 8000 yuan (about $1100) in China on the purchase of a new Model 3 vehicle, likely in a bid to increase demand.

What Happened: Customers can avail of the subsidy upon placing an order for any variant of the Model 3 before Feb. 28, the company says on its China website. The offer, however, applies only to the Model 3 and not to any of the company’s other offerings.

Tesla’s five-year zero-interest financing program also continues to be available till Feb-end for the two variants of the electric sedan besides the performance one.

The Model 3 is Tesla’s cheapest offering, starting at 235,500 yuan after the company hiked prices in January by 3,600 yuan. The most premium Performance variant starts at 339,500 yuan.

Expert Take: Tesla researcher Troy Teslike noted in a post on social media platform X on Tuesday that demand is dwindling for Tesla vehicles.

“Tesla is likely to struggle a lot with deliveries this quarter,” Teslike said. While the subsidy is an effort to improve the demand situation, it will have a limited impact, he said.

“I expect more promotions for the Model 3 and Model Y in Europe and the Cybertruck in the US,” Teslike added.

Tesla is likely to struggle a lot with deliveries this quarter.

They've just announced an 8,000 Yuan ($1,114) car insurance promotion for the Model 3 in China. It's an effort to improve the situation, but it will have a limited impact. I expect more promotions for the Model 3… pic.twitter.com/0ivbSjKG2l
— Troy Teslike (@TroyTeslike) February 5, 2025

Why It Matters: China is an important market for Tesla. In 2024, the company reportedly sold around 657,000 vehicles in China, marking a growth of 8.8% year-on-year, even while its global annual deliveries fell as compared to 2023.

Tesla reported global deliveries of 1.79 million vehicles in 2024, down from full-year deliveries of 1.81 million in 2023, marking the first decline in over a decade.

Tesla launched a refreshed version of the Model Y in China in January, slated to start deliveries in March, in a bid to refresh its lineup. The company has already commenced production of the refreshed vehicle at its gigafactory in Shanghai.

(1 yuan = 14 cents)

Check out more of Benzinga's Future Of Mobility coverage by following this link.

Read Next: