Tesla Inc (NASDAQ: TSLA) is introducing a 0% interest loan program in China, aiming to rejuvenate its sales in this vital market after experiencing a decline in market share.
Despite ending its end-of-quarter incentives, Tesla is swiftly rolling out new strategies to regain momentum in China's most extensive global auto and electric vehicle (EV) market.
Tesla saw its vehicle deliveries fall to 386,810 in the first quarter from 422,875 the previous year, marking the company's first year-over-year decline in deliveries since the pandemic-affected 2020.
The production also dropped to 433,371 from 440,808 units year-over-year.
Despite this decline, Tesla regained its position as the world's top battery electric vehicle manufacturer by volume, overtaking the Warren Buffett-backed BYD Company Limited.
Rivian Automotive, Inc (NASDAQ: RIVN) reported delivering 13,588 electric vehicles in the first quarter and confirmed its production target of 57,000 units for 2024.
Tesla's strategy of reducing prices in China and globally to drive sales yielded a different expected increase in sales volume. The competitors, especially in China, matched Tesla's price cuts, diminishing the effectiveness of this strategy.
Analysts have also noted a decrease in demand within Europe and anticipated supply chain issues in the U.S. stemming from updates to the Model 3 and a temporary halt in operations at the Giga Berlin factory.
Tesla has faced challenges in maintaining its market position, with its market share in China falling from 10.5% to approximately 6.7% throughout 2023, Electrek cites China's Passenger Car Association via Bloomberg.
The beginning of 2024 brought slight improvement for Tesla, as the company's first-quarter results revealed a reduction in global deliveries, marking the first decrease in years.
In response, Tesla's new incentive targets potential customers for the Model 3 and Model Y, requiring a hefty down payment of 79,900 yuan (~$11,000).
This move follows the announcement from China's People's Bank of China (PBOC) and National Financial Regulatory Administration (NFRA), which indicated a policy shift allowing financial institutions to set the "maximum disbursement ratio for the self-use of new energy vehicle or fuel vehicle loans."
Price Action: TSLA shares traded higher by 0.87% at $168.08 on the last check Wednesday.