Tesla Inc. has slashed the deposit that buyers in China have to put down on its cars.
The plan is part of Tesla’s plan to keep sales momentum in the face of intensifying competition and reductions in the government’s electric-vehicle subsidies.
Tesla now requires a 1,000 yuan ($143) non-refundable deposit for the Model 3 sedan, Model X SUV and Model S vehicle, a company representative in China said in a message Wednesday. Buyers were previously asked to pay a refundable deposit of as much as 20,000 yuan.
While the U.S. company has increased its lead in China’s EV market in recent months, competition is heating up. Local champion NIO Inc. has been energized by a capital injection from a regional government and a fresh credit line from six banks, while global peers including BMW AG and Mercedes-Benz maker Daimler AG are bringing out new EV models.
The deposit cut coincides with the latest reduction in China’s electric-car subsidies kicking in — a move that effectively increases the price of some vehicles. While Tesla lowered the price of its locally built basic Model 3 in April to meet the tighter subsidy criteria, some of its models are no longer eligible for the government handouts.