Tesla has launched a new incentive program in Shanghai, offering shopping vouchers worth 3,000 yuan ($420) to new customers. This initiative is a part of a broader local government program designed to stimulate consumption and revitalize the economy.
The automaker plans to distribute these vouchers to 3,000 customers who order and register either a Model 3 or Model Y electric vehicle in August.
Although this offer falls under the wider government initiative that includes discounts on groceries and movie tickets, Tesla’s move stands out as a strategic effort to stay competitive in the Chinese market. The competition in China, the world’s largest automobile and electric vehicle market, has grown intense, particularly with the presence of BYD Co., which manufactures both plug-in hybrids and fully electric vehicles, reports Bloomberg.
As per recent data, retail sales of new energy vehicles in China reached 647,000 in July, according to the Passenger Car Association. Tesla contributed significantly to these numbers, delivering 93,680 vehicles from its Shanghai factory in June, of which 74,212 were for the local market.
However, the influx of rival automakers forced Tesla to start slashing prices on its models from late last year, leading to a price war among manufacturers. This climaxed about a month ago, when Tesla and 15 Chinese automakers signed an agreement committing to avoid “abnormal pricing practices”. Though the specific pledge was soon retracted, authorities encouraged companies to promote fair competition.
Following this, Tesla introduced a referral incentive program, offering new buyers 3,500 yuan in cash and a free enhanced autopilot trial if referred by a current Tesla owner. This program is still active, as the company confirmed in its recent announcement about the shopping vouchers.
Despite the fierce competition, top EV makers in China reported impressive sales for July. BYD saw a 61% year-on-year increase, setting a new monthly record with 262,161 deliveries. Sales for Li Auto Inc., Nio Inc., and Xpeng Inc. also surpassed expectations.
However, as of a month earlier, none of China’s top automakers had reached 50% of their 2023 sales targets. This suggests that price cuts and other incentives, like Tesla’s shopping vouchers, might continue to feature prominently in the Chinese EV market.
