Tesla has decided to pull on demand levers in China with the launch of a new referral program in the market and cutting prices on Model 3 and Model Y.
Over the last few months, there have been increased concerns about softening of demand for Tesla vehicles.
It was enough for CEO Elon Musk to address it during the conference call following the release of Tesla’s Q3 2022 financial results.
The CEP reiterated 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.”
In terms of demand softening for Tesla, we reported earlier this month that Tesla’s demand shouldn’t be seen as a concern until Tesla starts pulling on some “demand levers” – meaning that the automaker takes some action to actually create some demand.
Tesla is pulling demand levers in China
For the better part of the last 2 years, Tesla has been coasting on the demand front and didn’t do anything to encourage it.
In fact, Tesla did the opposite by continuously increasing prices throughout its lineup and even stopped taking orders on some models because its backlog was getting too big.
Now we are seeing the tide changing for the first time in 2 years.
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 in launching a new referral program in China.
We have been reporting for a while that 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 reward through buying through these new referral links shared through the Tesla app.
The only difference is that instead of directly receiving awards, like free Supercharging miles, when a referrers take delivery, the Tesla owner and person behind referred receive “points”, which can later be exchanged for awards like in-vehicle software upgrades, Tesla accessories, or free Supercharging miles.
The points also enter Tesla owners into quarterly and annual raffles.
Here are the prizes for the first quarter 2023 raffle:
- Tesla Texas Belt Buckle, worth 998 yuan, 89 copies in total
- Tesla Model S stroller, valued at $5,999, 5 copies
- The third-generation home charging service package (national standard 40 meters installation service), worth 8,000 yuan, a total of 5 copies
- A 24-month right to use the in-vehicle software upgrade package “Fully Autonomous Driving Capability”, worth about 33,400 yuan, a total of 1 copy
And here are the prizes for Tesla’s first “annual sweepstakes”:
- Tesla Shanghai Gigafactory VIP Visit Invitation Letter (with 2 immediate family members), worth about 5,000 yuan/person, 5 copies in total
- The super charging mileage is 50,000 kilometers, worth about 24,600 yuan, a total of 2 copies
- 3-year right to use new items in the Tesla boutique, up to a value of up to $45,000, 1 in total
- Model 3 rear-wheel drive version or Model Y rear-wheel drive version of the vehicle for 1 year, worth about 47,500 yuan, a total of 1
Keyword: Tesla pulls demand levers in China, launches referral program and cuts prices