Tesla, looking to conquest, dangles cash bonus in key markets

Tesla Inc. rolled out a new incentive globally allowing buyers to earn extra incentives through referrals from existing customers, a strategy long used by traditional automakers to boost sales.

The cash rebates are applicable in markets including the United States, China, Canada and Germany, according to Tesla's regional websites on Friday.

The incentive, which Tesla has dubbed "Refer and Earn" on its websites, is the equivalent to about $500 in cashback to new buyers in the U.S., who purchase Model 3 and Model Y, as well as three months of its Full Self-Driving feature.
 

In the U.K., buyers using a referral will receive a discount of 1,000 pounds on Model S and Model X starting July 7, the company's website showed. The discount was for 500 pounds for Model 3 and Model Y.

In China, Tesla on Friday said it would also offer new buyers of its top-selling electric vehicles a cash bonus equivalent to almost $500 if they have a referral from an existing owner, deepening a price war in the world's largest market for EVs.

Tesla said it would offer new buyers of the Model Y and Model 3 vehicles a cash rebate of 3,500 yuan ($483) if they could cite a referral from an existing owner.

Tesla also said new buyers in China would have free access to its Enhanced Autopilot driver-assistance system for 90 days.

Since the start of the year, when it touched off a price war in China's EV market, Tesla has cut the base price of the Model 3 sedan in China by 14 percent and by 10 percent for the Model Y, its global best seller.

Tesla CEO Elon Musk in April doubled down on the price war, saying the company would prioritize sales growth ahead of profit in a weak economy and rising competition.

Tesla announced the latest rebate a day after joining 15 other companies, including Chinese EV makers Nio, Li Auto and Xpeng, in a pledge organized by the China Association of Automobile Manufacturers to avoid "abnormal pricing", interpreted by some to signal a truce in a price war that had threatened industry-wide profitability.

Volkswagen's China CEO Ralf Brandstatter said in a speech last month at an event attended by Chinese Premier Li Qiang that China's market for electric vehicles was marked by "high price discounts" and "an unhealthy competitive environment."

Tesla announced the cash rebates Friday on its Weibo account. It is continuing an earlier offer announced in June of 7,000-yuan rebates to buyers of the more expensive Model S and Model X in China.

A number of Tesla owners posted their referral codes online and invited others to use them on Friday, suggesting the cash rebate could be widely available for new buyers.

Tesla sold a record 247,217 China-made vehicles in the second quarter. That was the highest since it started delivering vehicles from a Shanghai factory in early 2020.

Tesla's sales of EVs produced in Shanghai in the second quarter accounted for over half of its global deliveries.

The company's shares have climbed almost 70 percent since early May, as investors reacted to indications its global price cuts and U.S. government incentives were boosting sales and bet the EV maker would be able to stabilize profit margins over time.

While the price cuts by Tesla and rivals boosted sales earlier this year in China, those gains have started to slow in recent months, prompting local authorities to roll out more buyer incentives, including purchase tax breaks for EVs.

Earlier this week, Tesla cut prices on the Model 3 and Model Y by between 3 percent and 4 percent in Japan.