Tesla has started a massive marketing campaign in China. After building the Gigafactory 3 (the plant belongs to the wholly-owned Tesla's subsidiary, comprising the whole production cycle) in Shanghai, the leading global car maker aims at the broader consumer groups by offering car loans with 0% interest rate.
Previously, the company announced that the starting price of Tesla Model 3 assembled in the Shanghai plant will amount to CNY 328,000 (USD 47,500). The new factory will have enough capacity to produce 500,000 vehicles per year in the short term. This number is close to the amount of battery electric vehicles sold a year ago in China — 579,000.
As web tech portal Liangziwei (量子位) reported with reference to the Tesla's official Weibo account, the global EV pioneer is taking the market penetration issue seriously this time: interest-free car loans will be provided for all Chinese citizens, while the credit period duration varies from 1 to 5 years depending on the province issuing the license plate for a particular car.
In a nutshell, the new car loan regime for Beijing looks as follows: on the date of a purchase, a Model 3 buyer is charged CNY 120,000 (USD 17,400), this amount is considered as cash deposit that will be paid back once the final payment against credit is made; As for the regular payments, the customer has to transfer CNY 11,700 (USD 1,700) every month over the three years of contract.
Although direct labor cost is supposed to be significantly lower in China, the company might still encounter deep short-term losses in the new market. A few days ago, He Xiaopeng, founder and chairman of Xpeng Motors, publicly expressed doubts about the local competitiveness of Tesla Model 3. However, the American EV giant seems to have bigger leverage than all the local competitors. It can always resort to dumping, relying on the brand and other market advantages.