China’s EVs compete on no down payment and 5-year interest-free loans

The Chinese electric car company welcomed the year of snakes with many incentives to consumers after major automakers reported a decline in delivery earlier this year.

Liz Lee, Associate Director of CounterPoint Research, said the softness of China’s consumption indicators raised concerns that car manufacturers may not be able to sell accumulated car inventory. “So around the Chinese New Year holidays… they’re just starting out on (these) offensive promotions. Let’s see how that continues.”

The New Year holiday of the month was held in mainland China from January 28th to February 4th this year, marking the year of the Chinese constellations of snake farming. In January, Beijing said it had already issued 81 billion yuan ($111.2 billion). Supports electric vehicle consumptionsmartphones and appliances over extended vacation periods.

Wednesday, the first official work day after the holidays, Tesla announcement 8,000 yuan Model 3 is the cheapest car with insurance subsidies and a 5-year 0% interest loan plan. This will pay a 34% down payment of approximately $11,000 this month to reduce the total price of the base version to participating and participating customers. 0% funding plan. Customers who pay a low down payment will be charged interest.

Tesla announced in January The same 5-year interest-free plan for the new model y In China, delivery is scheduled to begin in March. US automakers say sales in China Last year it hit a record highbut I warned Competitive pressure.

China startup xpeng on wednesday Down payment has been abolished It is highlighted in social media hashtags while offering 5-year interest-free funding agreements to the four models. Xpeng had already exempted the down payment for one of its G6 SUV, the G6 SUV, during its December operating agreement.

Nio Announced on February 1st 0% interest plan for 5 years For a month after total car sales fell from January 31,138 to 13,863 units.

This new promotion is a step up from the three-year 0% interest rate loan plan launched by the company in January. Competitors Li car It was announced in November 0% interest plan for 3 years.

The latest incentives are “important” and “how to lower prices without lowering prices,” says Stephen Dyer, partner and managing director, co-leading at Greater China at consulting firm Alixpartners. It states. Dyer also leads practices for the company’s Asian Automotive and Industrial Association.

He warned that unlike North American consumers, Chinese consumers tend to round out car price cuts and prefer to wait for further discounts.

Amidst seasonal pressure, several Chinese electric car companies reported a sharp decline in domestic delivery in January and December. Even the biggest players bydPassenger car sales fell to 296,446 in January from 509,440 units in December. Generally an analyst Predicting slow growth in industry After rapid expansion over the past few years.

“We’ve got a little shakeout now,” Dyer said. “The volume continues to be under pressure so you won’t be surprised to see more shakeouts this year.”

Deceleration Strengthen competition in the world’s largest automotive marketlocal players reduced prices and traditions Foreign brands are struggling To adapt to a rapid shift towards new energy vehicles. The category includes battery only and hybrid vehicles now More than half of new passenger cars sold in China.

CounterPoint forecasts show that the proportion of new energy vehicles in the Chinese passenger car market is likely to grow only by 2035, from around 50% this year.

Lee hopes that more international brands will soon launch their own incentives for Chinese car buyers. However, she expects the overall promotion to last only for a month or two, and the ultimate survivor will be a local brand.

Dyer said 20 new energy vehicle brands stopped operating in China last year, with 13 entering the market, resulting in the majority of new entrants being Chinese-language companies. He hopes “US automakers will probably worry the next time.”

China is not the only challenge.

Ford Motors earned it 600 million dollars in China Last year, on Wednesday, the Regional Director announced that he would lead the international market group. CEO Gym Farley said in a statement Its global success “needs to compete with Chinese automakers who also utilize China’s export operations and actively scale in these markets.”