Chinese electric vehicle (EV) manufacturers have ramped up competition in both China and Europe by launching a range of promotions over the Lunar New Year holidays, aiming to boost sluggish sales.
As the Year of the Snake begins, these Chinese carmakers are rolling out aggressive incentives to accelerate deliveries, potentially intensifying competition in the EV market. With consumer demand for big-ticket items falling in China amid economic uncertainty and rising living costs, concerns have grown over the ability of Chinese car manufacturers to clear their inventories.
Tesla has led the way by launching a five-year, 0% interest financing plan and offering an 8,000 yuan (€1,061) insurance subsidy on the Model 3, its most affordable car. Customers who make a 34% down payment of approximately $11,000 (€10,670) this month can expect to pay nearly $1,000 (€970) less for the basic Model 3, compared to its regular price, as long as they opt for the financing plan. However, those who choose a lower down payment will incur interest charges. Tesla began offering the same financing deal for its new Model Y in China in January, with deliveries of the Model Y expected to begin in March.
Xpeng Motors, a rising Chinese EV startup, has followed suit by eliminating the down payment requirement for its five-year, 0% interest financing plan for four of its models, including the G6 SUV, which had already seen its down payment waived in December.
Similarly, Nio, another key player in the Chinese EV market, has introduced a similar zero-interest, five-year financing plan for February, a step up from the three-year plan the company rolled out in January after its sales suffered a significant drop.
The Lunar New Year promotions come amid seasonal fluctuations in demand, pushing these companies to offer incentives that boost sales without directly reducing the car prices.
Adding to the push, the Chinese government introduced a subsidy worth 81 billion yuan (€10.7bn) in January, aimed at stimulating sales of electric cars, smartphones, and home appliances over the holiday period.
These moves are set to intensify competition in the European market as Chinese carmakers push to expand their presence, particularly in a region where EV sales are seeing rapid growth.
