Tesla, a maker of electric vehicles, has introduced a new initiative that enables buyers to obtain additional incentives through referrals from current customers. Traditional manufacturers have long utilised this tactic to increase sales. For customers in the US who buy the Model 3 or Model Y, the incentive, which Tesla called “Refer and Earn” on its websites, is comparable to $500 in cashback. Additionally, three months of the Full Self-Driving capability is included in the U.S. incentives.
According to the regional websites of the corporation, the programme was launched on Friday in Tesla’s key markets, including the US, China, Germany, France, Canada, Mexico, Hong Kong, and Singapore.
A Reuters inquiry for comment on the rebates received no immediate response from Tesla. Employee and loyalty discounts have historically been employed by established automakers to reduce sticker prices.
Tesla has up to now concentrated on making real-time adjustments to prices listed on its websites after previously discontinuing the referral programme because it was too expensive. According to observers, it just brought back the referral programme to increase sales. The global EV sales market has been more competitive, driving automobile manufacturers to lower prices or increase incentives in some areas.
How did Tesla step up its pricing game?
Elon Musk, the CEO of Tesla, stepped up the pricing battle in April, declaring that the company would put sales growth ahead of profit in a struggling economy and in the face of intensifying competition.
According to CFRA analyst Garrett Nelson on Friday, “Clearly, they’re doing everything possible to boost volumes and take market share.” The main concern, according to Nelson, centres on Tesla’s profit margins and the effects of the price reductions it has announced.
Margin issues still exist since the company’s inventory is still expanding, albeit more slowly than before, according to Chris Pierce of Needham. On July 19, Tesla is slated to release its second-quarter financial results.
The automaker has used the EV price war as a tool to exert pressure on both established automakers and cash-strapped EV startups by using its sector-leading profit margins. Tesla stock has increased by more than twice as much as the S&P 500 index this year, outpacing that increase by 15%. On Friday, the stock saw a little increase.
As traditional automakers try to implement aggressive development plans, ramp-up issues with EV production are probably going to be common, Nelson added. Ford reported a 2.8% drop in second-quarter EV sales on Thursday.
Tesla announced on Friday that it would provide new customers in China a cash rebate of 3,500 yuan ($483.69) for purchasing a Model Y or Model 3 if they could provide proof of a referral from an existing owner.
Many Tesla owners in China asked others to use their referral codes by posting them online. Starting on July 7, customers utilising a recommendation in the UK would receive a discount of 1,000 pounds ($1,278.00) off Model S and Model X purchases. The Model 3 and Model Y discounts totaled 500 pounds.
Tesla, whose prices have been rapidly reduced since late last year, beginning in China, has delayed price reduction on its new orders but increased discounts on its already manufactured cars.
As price reductions and U.S. tax incentives helped make its electric vehicles more accessible, the manufacturer delivered a record number of vehicles in the second quarter on Sunday, exceeding market expectations. In the second quarter, Tesla also delivered a record number of its vehicles built in China.
