Analysis of the Erosion of Gross Margin by Financial Interest Subsidies of New Energy Vehicle Manufacturers

Based on my search results, an important clarification is needed:

. You may have confused CHAGEE (a beverage enterprise) with the financial promotion policies of new energy vehicle manufacturers.

According to the searched information, the main entities that launched the “5-year 0-interest car purchase program” after the 2025 Spring Festival are

, including XPeng, Tesla, NIO, HarmonyOS Intelligent Mobility, etc.[1]

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In 2025, new energy vehicle manufacturers have shifted from “cash price cuts” to “financial interest subsidies” as a promotional model:

Vehicle Manufacturer	Financial Program	Down Payment	Maximum Subsidy Amount
XPeng Motors	5-year 0-interest, 0 down payment	RMB 0	Approximately RMB 57,000
Tesla	5-year 0-interest	Starting at approximately RMB 80,000	RMB 8,000 insurance subsidy
NIO	5-year 0-interest	Starting at 20%	Full waiver of handling fees
HarmonyOS Intelligent Mobility	3-year 0-interest / 5-year low-interest	Starting at RMB 79,800	Up to RMB 17,000

[1][3]

The cost of financial interest subsidies mainly includes:

• Interest Subsidy
  : Calculated based on 5-year installments, vehicle manufacturers bear all or part of the loan interest
• Handling Fee Waiver
  : Usually 1%-3% of the loan amount
• Channel Rebate
  : Some programs involve dealer subsidies

Assume a vehicle is priced at RMB 200,000 with a 5-year 0-interest program:

Item	Traditional Program	5-year 0-interest Program	Difference
Loan Interest Rate (Assumed)	4.75%	0%	-4.75%
5-year Interest Expense	Approximately RMB 25,000	0	+RMB 25,000 in cost
Handling Fee	Approximately RMB 2,000	0	+RMB 2,000 in cost
Total Per-Vehicle Subsidy	-	Approximately RMB 27,000	-

If the gross margin of this vehicle model is 15% (the industry average is approximately 10%-20%), then:

• Gross profit amount: RMB 200,000 × 15% =
  RMB 30,000
• Proportion of financial interest subsidy: 27,000 ÷ 30,000 =
  90%

Based on the searched financial data:

1. Overall Industry Profit Decline
   :
   • In the first three quarters of 2025, the total revenue of 14 listed vehicle manufacturers exceeded RMB 2.07 trillion, but net profit was only RMB 36.4 billion, and the overall net profit margin dropped to a
     record low of 1.76%
     [4]
   • Half of the enterprises are in a loss-making state

2. Per-Vehicle Gross Margin Under Pressure
   :
   • The per-vehicle gross margin of enterprises such as NIO and Li Auto has dropped to
     around 15%
     , which is lower than the 20% level in 2023[5]
   • BYD’s 2024 auto sales gross margin was
     9.2%
     , a year-on-year increase of 4.1 percentage points, but a month-on-month decrease of 2.7 percentage points[6]

3. Decline in Financial Penetration Rate
   :
   • In 2024, the financial penetration rate of new energy vehicles dropped sharply from 20%-21% in 2023 to
     14%
     [7]
   • The financial penetration rate of traditional energy vehicles slightly decreased from 34% to 31%

Dimension	Short-Term Impact	Long-Term Impact
Sales Volume	Increase order volume, shorten delivery cycle	Overdraw future demand
Cash Flow	Subsidy expenditures increase cash flow pressure	Scale effects dilute fixed costs
Brand	Enhance market competitiveness	May damage brand premium capability
Profitability	Gross margin is obviously under pressure	Profitability recovers after scaling up

Judging from the 2025 industry trends, vehicle manufacturers are shifting from “trading price for volume” to “value creation”[4]:

• Technological Innovation
  : Intelligent upgrade, popularization of 5C ultra-fast charging technology
• Value-Added Services
  : Differentiated services to enhance customer stickiness
• Cost Control
  : Dilute costs through scale, optimize supply chain

1. Policy Risk
   : In August 2025, the “Implementation Plan for the Fiscal Interest Subsidy Policy for Personal Consumer Loans” was issued, and government interest subsidies may change the competitive landscape[7]
2. Intensified Bank Competition
   : Commercial banks have entered the auto finance sector relying on their capital cost advantages, impacting auto finance companies
3. Rising Non-Performing Loan Ratio
   : After industry rectification, attention should be paid to changes in credit risk

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The financial interest subsidy strategies of new energy vehicle manufacturers have a significant erosion effect on gross margin. Taking the 5-year 0-interest program as an example, the per-vehicle subsidy amount can reach RMB 20,000-50,000, and with a per-vehicle gross profit of RMB 30,000-40,000,

.

However, this strategy is necessary in the current market competition environment:

• Maintain market share and delivery volume
• Respond to the impact of purchase tax policy adjustments
• Maintain competitiveness in industry reshuffling

In the long run, vehicle manufacturers need to find a balance between scale effects and technological innovation to gradually restore profitability.

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[1] Sina Finance - “Ren Zhengfei, Breaking News! Netizens: CHAGEE Steals the Show” (https://finance.sina.com.cn/roll/2025-02-12/doc-inekfsta9225394.shtml)

[2] Youjia - “5% Purchase Tax Hits New Energy? Don’t Be Naive! Three Vehicle Manufacturers Have Taken Action” (https://youjia.baidu.com/view/articleDetail/9134666874607282754)

[3] Securities Times - “Auto Finance Transformation: Asset Scale Drops 10% Year-on-Year” (https://www.stcn.com/article/detail/3290923.html)

[4] The Paper - “New Energy Vehicles in 2025: Fierce Competition, Gradual Profitability” (https://m.thepaper.cn/newsDetail_forward_32311857)

[5] Fitch Bohua Auto Finance Report (cited from Securities Times report)

[6] NIO 2024 Financial Report (cited from Shenwan Hongyuan analysis report)

[7] 21st Century Business Herald - Auto Finance Industry Analysis