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After the festive season of Spring Festival, a novel phenomenon has emerged in the Chinese automotive market: a renewed "price war." Unlike the cash discounts of the past two years primarily offered by new energy vehicle manufacturers, companies are now focusing on interest reduction policiesThis strategic shift is designed to lower the barrier for consumers looking to purchase vehicles, thereby capturing the attention of the market.

Leading the charge in this new wave of consumer incentives is Tesla, which jumped into the fray almost immediately after the Spring FestivalOn February 5, Tesla announced that from that day until February 28, all models of the Model 3 would enjoy an insurance subsidy of 8,000 yuan (approximately $1,200). After applying this subsidy, the lowest price for the Model 3 is now only 227,500 yuan (around $35,000). Moreover, buyers will benefit from a loan policy offering five years of zero-interest financing as well as exclusive charging privilegesSales personnel from Tesla's Shanghai store noted that this is the first time the full Model 3 series has received such an insurance subsidy and that this is the first combined offering of both insurance subsidies and zero-interest financing.

This marks the most substantial cumulative offer for the Model 3 since its introduction in China, allowing consumers to save up to 71,000 yuan (approximately $10,500) on the long-range versionIn response to Tesla's aggressive promotion, various domestic electric vehicle manufacturers quickly followed suit with their own interest reduction policiesCompanies such as Xiaopeng, Jihe, and Avita introduced competitive financing solutions soon after.

For example, on February 7, Avita unveiled a three-year zero-interest financing policyCustomers who purchase specific available models like the Avita 07, Avita 11, and Avita 12 can enjoy a limited-time discount of 10,000 yuan, while the promotional period runs from February 7 to February 28. Sales personnel reported that the discounts vary between these three models, and combined with insurance subsidies and Shanghai purchase incentives, total discounts can range from 44,000 yuan to about 54,000 yuan, depending on the selected model.

According to the sales representatives, Avita has always maintained zero-interest financing, but it was previously limited to two years

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The recent expansion represents a strategic enhancement aimed at boosting salesIn January alone, Avita sold 8,826 vehicles, marking a 25% year-on-year increaseLast year at the Chang'an Automobile Global Partner Conference, Avita set a sales goal of 220,000 units for the year — a 150,000-unit increase from 2024's targetIn addition to introducing range-extended versions of their vehicles, first-line sales subsidies are critical, making the three-year zero-interest policy a significant aid in achieving this goal.

Moreover, it’s noteworthy that during the Spring Festival period, some companies had already started offering zero-interest financing optionsOn February 1, NIO announced their five-year zero-interest financing programBetween February 1 and February 28, users making a deposit to purchase NIO vehicles could benefit from a down payment starting at 20% with no financing feesFor instance, for the NIO ET5 with a standard range 75 kWh battery pack, the down payment is only 45,600 yuan (about $6,800), while buyers of the NIO ES8 pay a starting down payment of 85,600 yuan (around $12,900).

To break down this further, different models under the five-year zero-interest financing plan offer monthly payments ranging from 3,768 yuan to 6,435 yuan (approximately $560 to $960), which translates to daily contributions between 126 yuan to 215 yuanAccording to a financial scheme with an annual effective rate of 2.59%, users could save between 23,600 yuan and 44,300 yuan over the five years, while using industry average financing terms with a 3% rate could save even moreAdditionally, buyers during this promotional period could stack on top of their savings an extra 10,000 yuan selection fund, free battery swap vouchers, and a free five-year usage of the NOP+ feature.

Industry experts analyze that NIO's five-year zero-interest initiative is not merely a simplistic price battleIn the face of fierce competition in the high-end electric vehicle market, the company aims to use financing tools to lower barriers, establish a robust charging network, and enhance customer loyalty through intelligent features, marking a competitive paradigm where "user experience comes first."

On February 7, another brand under NIO, the sub-brand Life Road, introduced limited-time purchase incentives, offering the Life Road L60 model with a zero down payment and zero interest finance policy, running until February 28. Additionally, during the promotion, customers could gain three years of free NOA (Navigate on Autopilot), three years with a battery rental offer of "four for one," and 24 free battery-swapping vouchers among other attractive upgrades.

The Life Road brand managed to sell 5,912 vehicles in January

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Previously, NIO’s founder Li Bin had confidently stated that Life Road aims to achieve a monthly delivery target of 30,000 vehicles by March, which implies that the brand must quintuple its delivery in just two monthsHence, the zero down payment and interest-free financing policy will be crucial for boosting sales in February.

Jiang Han, a senior research fellow at the Pangu Institute, commented that by reducing financial barriers to vehicle acquisition, NIO can attract more potential buyers without resorting to direct price reductionsThis strategy not only preserves brand value but also alleviates sales pressure to some extent, providing a flexible approach to market challenges.

The policy of “five years of zero-interest financing” and “as low as 20% down payment” fundamentally functions to diminish the cost burden and financial strain on consumers, thereby drawing in a larger pool of potential customersFor many potential NIO buyers, the high price tag can be a major deterrent to making a purchaseHowever, with installment payments and lower down payment options, consumers can distribute their vehicle costs over a longer timeframe, easing the strain of a lump-sum payment.

On the same day Tesla initiated its "price war," Xiaopeng launched a "five-year zero-interest and zero down payment policy" covering models like the Xiaopeng X9, G9, P7i, and G6. The maximum interest subsidy available through this purchase method reaches 57,000 yuanA sales representative noted that this marks Xiaopeng’s first initiative for a zero down payment event in years, emphasizing the strength of this offeringIt's worth mentioning that the relatively popular models like Xiaopeng MONA MO3 and P7+ are not included in this event.

Sales personnel in the Shanghai market noted that “zero down payment” is immensely appealing to consumers, as the newly introduced zero-interest policy significantly lowers the purchasing threshold

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