The battle for Chinese customers amid the slowdown in car purchases is taking a new turn as several automakers have put up a challenge to Tesla’s (TSLA) strategy launched earlier last month. As a result, Tesla’s shares wobbled in Wednesday’s pre-market trading.
Claim 55% Off TipRanks
New trading tool for TSLA bearsTesla Seeks to Regain Ground in China
Starting in early January through the month-end, Tesla offered zero-interest loans of up to five years to customers in the world’s largest automobile market. The electric vehicle maker topped this with ultra-low-rate seven-year loans, with both packages applying to the Model 3 sedan and the Model Y and Model Y Long Range sport utility vehicles.
The move came as Tesla lost its crown as the world’s biggest electric vehicle seller last year to Chinese rival BYD Co. (BYDDF), and saw shipments of vehicles from its Chinese factory decline 7% in 2025.
Chinese Automakers Turn Up the Heat
However, several Chinese automakers have now also launched similar offerings to attract customers, further heating up competition amid an already intense price war. For instance, Dongfeng Nissan, the joint venture between state-owned Chinese automaker Dongfeng (DNFGY) and Japanese carmaker Nissan (NSANY), has rolled out a limited-time Spring Festival offering of an eight-year low-interest plan for some models, according to local media reports.
In addition, reports indicate that other local rivals, such as Xiaomi (XIACF), Li Auto (LI), Xpeng (XPEV), and Geely (GELYF), have also kicked off similar plans to attract customers.
Auto Sales Fall in January in China
In 2025, Chinese carmakers such as Nio (NIO) and Xpeng (XPEV) significantly expanded their deliveries. However, as automakers contend with market saturation, market leader BYD saw its sales growth crawl to the slowest in five years while Tesla’s sales in the country dropped.
Already, Chinese automakers have reported weakness in January demand as price wars and the end of a government subsidy for trading in budget vehicles impacted consumer interest.
Is Tesla Stock a Buy, Sell, or Hold?
On Wall Street, Tesla’s shares remain a Hold based on analysts’ consensus rating. This breaks down to 11 Buys, 12 Holds, and seven Sells issued by 30 analysts over the past three months.
Moreover, at $393.51, the average TSLA price target indicates over 7% downside risk from the current trading level.
