'Horror Show' For Tesla's Q3 Margins, Says Analyst, As Elon Musk-Led Company Extends Zero-Percent Financing To End Of Q3

Tesla, Inc. TSLA has extended further the “zero-percent” financing option it made available to Chinese buyers till the end of the third quarter, and a bearish analyst on Monday commented on the move.

What Happened: Tesla China’s configurator page for the Model Y and Model 3 electric vehicles, which are the only vehicle lineups the company manufactures in the country, showed that the limited five-year 0% interest financing plan is available for all variants of these models until Sept. 30.

This incentivized buying plan was initially set to expire by the end of August. The zero-interest financing option allows a customer to buy a re-engineered Model 3 for as low as 2,533 yuan ($356) per month, and the Model Y for 2,833 yuan ($397) per month, with a 79,900 yuan ($11,219) down payment, Teslarati reported.

See Also: How to Buy Tesla Stock

Why It’s Important: Commenting on the development, GLJ Research’s Gordon Johnson said in a post on X that this will be a “horror show” for Tesla’s third-quarter margins. He noted that this offer was applicable in China for only a month in the second quarter, while in the third quarter, it is set to be applicable for all three months.

Also, the analyst said the extension could mean Tesla could be facing a serious demand problem in China.

Tesla’s second quarter benefited from the zero-percentage financing and the top-line beat estimates, but its bottom line missed expectations, reflecting margin pressure.

In premarket trading on Monday, Tesla shares edged down 0.25% to $219.76, according to Benzinga Pro data.

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