Elon Musk's Tesla Introduces Limited Time Insurance Subsidy Of Over $1000 On Model 3 Purchases In China

EV giant Tesla Inc. TSLA is offering a limited-time insurance subsidy of 8000 yuan ($1,101) in China for buyers of its Model 3 sedan, in a seeming bid to increase demand.

What Happened: Customers must place their orders before March 17 to avail the subsidy, the company said in a notification on its website.

Customers purchasing the rear-wheel drive variant or the long-range all-wheel drive variant can also apply for a limited-time 5-year 0% interest financing plan, the company said.

The Model 3 is Tesla’s cheapest vehicle offering. In China, the vehicle starts at 235,500 yuan while its high-end Performance variant starts at 339,500 yuan.

Why It Matters: The new offer announcement comes on the heels of data from the China Passenger Car Association showing that Tesla’s sales of its vehicles made in China dropped by 49.2% in February to 30,688 cars. This includes Model 3 and Model Y vehicles sold in China as well as exported to markets including Europe.

Tesla also introduced 0% annual percentage rate (APR) financing on all Model 3 trims in the U.S. on Tuesday. Customers in the U.S. can now purchase the Model 3 with 0% APR financing for a period of 60 months and $3,999 down payment.

In the first quarter of 2024, Tesla delivered 386,810 vehicles around the globe. This year, sales are down in Europe and China thus far, raising concerns that quarterly deliveries might be lower. The company also introduced a refreshed Model Y in January, which company CEO Elon Musk said would result in days of lost production as factories are retooled to accommodate the new vehicle.

According to Tesla researcher Troy Teslike, who tracks Tesla production and delivery numbers, the EV giant's deliveries in this quarter are expected to be the lowest they have been in the past 10 quarters.

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