Tesla's Surging Order Flow In China Prompts EV Maker To Halt 0% Down Payment Program

Tesla Inc.'s TSLA strong showing in China is among the major reasons for its outperformance in the third quarter. It now appears Tesla's China momentum is accelerating.

What Happened: Within days of launching of a "zero minimum down payment" option, Tesla has opted to roll it back, Chinese media outlet Sina reported. The minimum down payment now required to purchase a Tesla vehicle in China is 10%, the report said.

The decision to cancel the 0% down payment, which was originally announced on Monday, was said to be due to a spike in orders that has the potential to lengthen the delivery time. Tesla fears this could affect user experience, the report added.

Delivery time for the Model 3 Standard Range Plus is currently about 6 to 10 weeks and the Model 3 Performance was shown as being in the fourth quarter, Teslarati stated, citing Tesla China's online configurator. The company may be looking to avoid carrying backlog into early next year, it added.

Related Link: Class Of 2010: A Decade After Their IPOs, Where Are These Companies Now?

Why It's Important: China is a vital cog in Tesla's EV story, given the vast market potential and the domestic manufacturing that is acting as an export hub and also helping to expand margins.

A positive demand outlook for the company in China bodes well for the EV maker's near-term performance.

In the third quarter, Tesla delivered a record 241,300 vehicles, fueled by strong sales in China.

TSLA Price Action: Tesla shares were rising 0.97% to $1,225.29 as of publication Thursday morning.

Photo: Model 3, courtesy of Tesla Inc.

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