Tesla is once again turning to financing incentives in China, extending its 7-year ultra-low-interest and 5-year interest-free loan programs as competition in the world’s largest EV market continues to intensify.
Tesla China confirmed this week it has once again extended its 7-year ultra-low-interest and 5-year interest-free financing programs, with the offers now valid through March 31, 2026, the second extension of the long-term loan promotion this year.
The extended incentive still applies to the Model 3, Model Y, and the six-seat Model Y L. Under the promotion, buyers can access extended-term loans with significantly reduced monthly payments. Tesla is also highlighting that customers can opt for a five-year 0% interest plan, eliminating interest costs entirely.
Tesla first introduced the unusually long seven-year financing option in early January, shortly after China confirmed a 5% new energy vehicle (NEV) purchase tax would take effect in 2026. Originally scheduled to expire at the end of January, the program was extended once in late January and is now being pushed through the end of March.
The repeated extensions suggest Tesla is leaning on creative financing to maintain demand without engaging in another direct price war. That strategy comes as the competitive landscape grows increasingly crowded.
More than ten automakers have rolled out similar long-term financing plans in recent weeks, according to CNEvPost. BYD, Nio, Li Auto, Xpeng, and Geely have all introduced seven-year low-interest loan programs. Xiaomi — whose YU7 SUV recently overtook the Model Y as China’s top-selling EV in January — moved quickly in mid-January to match Tesla’s extended financing terms.
China’s regulators have been discouraging destructive price wars, prompting brands to pivot toward softer tactics like loan incentives and lower down payments instead of continuous sticker price cuts.
