Tesla offers cash rebate on top models in China

tesla-offers-cash-rebate-on-top-models-in-china
Tesla offers cash rebate on top models in China

Tesla has announced that it will offer a cash bonus of nearly $500 to new buyers of its popular electric vehicles in China if they have a referral from an existing owner. This move is part of a price war in the country, which is the largest market for electric vehicles.

The cash rebate of 3,500 yuan ($483) will be given to new buyers of Tesla’s Model Y and Model 3 vehicles who can provide a referral from an existing owner. In addition to the cash bonus, new buyers will also have free access to Tesla’s Enhanced Autopilot driver-assistance system for a period of 90 days.

Since the beginning of the year, Tesla has been engaged in a price war in China’s electric vehicle market. The company has reduced the base price of its Model 3 sedan by 14% and the Model Y by 10%, making it more competitive in the market.

Tesla’s announcement of the cash rebate comes after the company joined 15 other companies, including Chinese electric vehicle makers Nio, Li Auto, and Xpeng, in a pledge to avoid “abnormal pricing”. This move has been seen by some as a signal of a truce in the price war that threatened the profitability of the entire industry.

Volkswagen’s China CEO, Ralf Brandstatter, has previously commented on the “high price discounts” and “unhealthy competitive environment” in China’s electric vehicle market.

Tesla made the announcement of the cash rebates on its Weibo account. This offer is an extension of a previous offer made in June, which provided 7,000-yuan rebates to buyers of Tesla’s more expensive Model S and Model X vehicles in China.

Many Tesla owners have shared their referral codes online, suggesting that the cash rebate could be widely available to new buyers.

Data released earlier this week showed that Tesla sold a record 247,217 vehicles made in China in the second quarter. This was the highest number since the company started delivering vehicles from its Shanghai factory in 2020. Sales of Tesla’s Shanghai-produced cars accounted for over half of its global deliveries in the second quarter.

Tesla’s shares have seen a significant increase of almost 70% since May, as investors responded positively to the company’s global price cuts and government incentives in the United States. There is optimism that Tesla will be able to stabilize its profit margin over time.

While the price cuts by Tesla and its competitors initially boosted sales in China, the growth has started to slow in recent months. As a result, local authorities have introduced more buyer incentives, including purchase tax breaks for electric vehicles.

Earlier this week, Tesla also reduced prices on the Model 3 and Model Y by 3% to 4% in Japan.

Please note that the range of price cuts in Japan was corrected to be between 3% and 4%, not 3% and $5, as previously stated.

In conclusion, Tesla’s move to offer cash bonuses to new buyers in China is part of a price war in the country’s electric vehicle market. The company aims to boost sales and maintain its market share in the world’s largest market for electric vehicles.

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