(Yicai Global) Feb. 2 -- Chinese new energy vehicle makers, including startup Nio, have cut loan interest rates and are offering rebates or subsidies to buyers in response to a new round of price cuts by US electric vehicle giant Tesla.

Nio launched new finance policies this month, reducing the loan interest rate for all vehicle models from 2.99 percent to 1.99 percent, and offering free interest for two to three years, Yicai Global learned today from the Shanghai-based firm.

Nio did not respond to online rumors about the firm slashing its vehicle prices by up to CNY100,000 (USD14,900), only saying that it will offer discounts on some autos in stock to upgrade its vehicle models.

Tesla cut prices in China early this year, lowering the minimum cost of its entry-level Model 3 to CNY229,900, a record low, from CNY265,900.

More carmakers are choosing to offer rebates or subsidies rather than cutting prices directly because that would likely trigger complaints from customer who have already purchased the vehicles.

Geely Automobile Holdings’ Zeeker brand unveiled a limited-time discount of CNY17,200 for exterior trims and air suspension sleeves on Jan. 31, while Guangzhou Automobile Group’s Aion yesterday announced the introduction of a limited-time CNY5,000 rebate for some models as well as a three-year interest-free policy.

Sales of Chinese EV makers generally dropped last month after Tesla cut its prices and the Chinese government’s subsidies on new energy vehicles ended at the end of last year.

Nio’s sales fell 12 percent to 8,506 units in January from a year earlier, while Xpeng Motors’ tumbled 60 percent to 5,218 and Zhejiang Leapmotor Technology’s sank 86 percent to 1,139.

Editors: Dou Shicong, Peter Thomas