While people are still arguing whether Tesla is overvalued, the share price has risen close to 20X in the past two years:
A key driver of it is growth is the market in China, where of course it has the competition of domestic players Nio, Xpeng and Li Auto.
A number of friends of mine are complaining that Tesla’s interior is far inferior (kind of rhymes) compared to the others, but they were almost always surprised that their cousins, uncles and even parents were buying Tesla.
For those buyers, the reason is amazingly simple: “Good brand, but more importantly, very good value for money“.
In the latest (Q3) quarterly report, Tesla’s sales in China is already half of that in the US.
And Tesla has been making it easier and easier for people in China to buy more of its cars. After a few rounds of price drops, today it announced a new financing scheme – essentially a set of zero payment instalment plans:
- Down payment starts with zero;
- You can choose to pay up to 70% of downpayment;
- Terms: 1-5 years (flexible)
The ownership of the car will only be transferred at the end of the leasing term.
Previously, with financing partners, 15% downpayment was required. With the new financing scheme, anyone with good credit score could basically drive a Tesla away without any upfront cost.
Will that further boost Tesla’s sales in China in Q4?
Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected]