Tesla China is gearing up as the price war in the country increases. The automaker is gearing up for the competition by cutting the prices of Model 3 and Model Y. Also, launching a new referral program in the market.
In recent times this year, the concerns about Tesla vehicle demand were there. It was out when the CEO, Elon Musk addressed the concern on the conference call of Tesla’s Q3 2022 financial results. Musk stated that “Tesla doesn’t have a demand issue. I can’t emphasize enough, we have excellent demand for Q4, and we expect to sell every car that we make for as far in the future as we can see.”
To be precise, the demand concern didn’t arise till earlier this month, when it was said that it wouldn’t be a concern until the company gears up for it. Until there are some changes to boost the demand for the Tesla vehicles in the market. Some action had to be taken and that resulted in a price cut. Recently Tesla announced new colors out of its German factory. These new colors are being sold out for months longer than previous colors, even with a premium price of €3200.
Demand increase
Over the past two years in China, the automaker did not do anything particular with respect to demand. It has been relatively steady despite the increasing prices throughout the past year. There was also a point, where the EV company stopped taking orders for some models because its backlog was getting too big. Now the changes are happening in a different direction.
One of the biggest demand levers you can pull is reducing prices, and that’s exactly what the automaker is doing in China. Today, Tesla reduced the starting price of its Model 3 built in China to 265,900 yuan (~$36,800) from 279,900 yuan. The Model Y SUV in China also saw a price reduction to 288,900 yuan from 316,900 yuan. Furthermore, Tesla has pulled another demand lever by launching a new referral program in China.
Tesla has been working on a new referral program for vehicle owners after shutting it down completely last year. Last week, we reported on how Tesla should be launching it soon based on some new code in the Tesla mobile app. Now Tesla has launched a version of the new referral program in China. The automaker is calling it the ‘” Treasure Chest” Points Rewards program. Like the previous referral program, Tesla owners can get rewards if new buyers order through their referral links. The new buyers also get rewards through buying through these new referral links shared through the Tesla app.
