Tesla Model 3 Insurance Subsidy China Revived With New Financing Push

Tesla has reinstated insurance incentives for the Model 3 in China as it sharpens its pricing and financing strategy in the world’s largest electric vehicle market. The move comes shortly after the company introduced ultra-long-term financing to stimulate demand during a traditionally slower sales period.
Chinese customers purchasing a Model 3 on or before February 28 are eligible for an insurance subsidy of RMB 8,000 ($1,150). The offer applies to the rear-wheel drive, long-range rear-wheel drive, and long-range all-wheel drive variants, according to a Weibo post by Tesla.
Model 3 Variants and Pricing Eligible for the Subsidy
The insurance subsidy covers three Model 3 configurations currently sold in China, each positioned at different price points to address a wide customer base.

• Rear-wheel drive variant starting at RMB 235,500

• Long-range rear-wheel drive variant starting at RMB 259,500

• Long-range all-wheel drive variant starting at RMB 285,500

Tesla’s performance all-wheel-drive Model 3, priced from RMB 339,500, is excluded from the latest incentive. The selective coverage reflects Tesla’s focus on higher-volume trims that appeal to cost-conscious EV buyers.
Financing Strategy Builds on Earlier Market Incentives
The renewed insurance subsidy follows Tesla’s January 6 rollout of a seven-year low-interest financing plan for vehicle purchases in China. That move marked a notable shift toward longer repayment periods aimed at easing upfront cost pressures for consumers.
After Tesla’s announcement, several automakers moved quickly with similar financing offers, including Xiaomi, Li Auto, Xpeng, and Voyah. The coordinated response highlights intensifying competition in China’s electric vehicle market.
Policy Changes Pressure Early-2026 EV Demand
These measures are designed to counter softer auto demand entering 2026, driven by multiple policy and cost factors affecting new energy vehicle buyers.
Key demand headwinds include:

• A 5% purchase tax now applied to NEVs, replacing the earlier full exemption from the standard 10% rate

• The expiration of trade-in subsidies in most Chinese cities in mid-November, with extensions still in a transitional phase

Together, these changes have increased the effective ownership cost for EV buyers, prompting automakers to rely more heavily on financial incentives.
Tesla China Sales Performance Sets the Context
Tesla’s China deliveries in 2025 totaled 625,698 vehicles, marking a 4.78% year-on-year decline. Within that performance, the Model 3 showed relative resilience, with 200,361 units delivered in China, representing a 13.33% annual increase.
Despite this growth, Model 3 sales were overshadowed by the Model Y, which delivered 425,337 units during the year, although Model Y volumes declined 11.45% year on year. The revived Tesla Model 3 insurance subsidy China initiative signals a targeted effort to sustain momentum for the sedan amid shifting market dynamics and regulatory pressures.