Tesla has reinstated insurance subsidies for its Model 3 electric sedan in China, the company said, as it steps up incentives in the world’s largest electric vehicle market following the introduction of ultra-long-term, low-interest financing earlier this month.
Chinese customers who purchase eligible Model 3 variants by Feb. 28 will receive an insurance subsidy of 8,000 yuan ($1,150), according to a statement posted on Weibo by Tesla. The offer applies to the rear-wheel-drive, long-range rear-wheel-drive and long-range all-wheel-drive versions, which are priced from 235,500 yuan, 259,500 yuan and 285,500 yuan, respectively. The performance all-wheel-drive variant, priced from 339,500 yuan, is excluded.
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Tesla has offered insurance subsidies at the start of the year for the past two years as a way to counter seasonal weakness in China’s auto market, typically scaling back the incentives as demand recovers. The latest move comes after the company launched a seven-year low-interest financing plan for vehicle purchases in China on Jan. 6.
Several domestic automakers, including Xiaomi, Li Auto, Xpeng and Voyah, have since introduced similar long-term financing offers, highlighting intensifying competition as demand shows signs of slowing in early 2026.
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The incentives come as policy support for new energy vehicles eases. From 2026, buyers face a 5% purchase tax, replacing the previous full exemption from the standard 10% rate, while trade-in subsidies in most cities expired in mid-November and are now being rolled over in a transitional phase.
Tesla’s China sales fell 4.78% in 2025 to 625,698 vehicles, the company said. Deliveries of the Model 3 rose 13.33% to 200,361 units, while sales of the Model Y declined 11.45% to 425,337 units, underscoring the pressure Tesla faces in maintaining growth in a crowded market.