Tesla, the renowned electric vehicle manufacturer, has introduced a new global referral program aimed at incentivizing buyers through referrals from existing customers. This strategy, commonly employed by traditional automakers, offers an opportunity for buyers to receive extra benefits when purchasing a Tesla vehicle. Known as the “Refer and Earn” program, it provides a cashback incentive of $500 to customers in the United States who purchase either the Model 3 or Model Y, along with a three-month subscription to the highly sought-after Full Self-Driving feature. This program has been rolled out in Tesla’s major markets worldwide, including the United States, China, Germany, France, Canada, Mexico, Hong Kong, and Singapore.
While legacy automakers have historically utilized employee and loyalty discounts to reduce the sticker price of cars, Tesla had previously discontinued its referral program due to its high costs. However, the company has now revived the program as part of its efforts to bolster sales. With the global electric vehicle market becoming increasingly competitive, automakers are resorting to price cuts and enhanced incentives to maintain their market share. Tesla CEO Elon Musk has emphasized a focus on sales growth over profit, particularly in a weak economy and amid rising competition.
Nevertheless, concerns linger regarding Tesla’s margins, primarily due to the price reductions implemented by the company. Although the inventory is still expanding, albeit at a slower rate, analysts raise questions about the potential impact on margins. Tesla is scheduled to announce its second-quarter results on July 19, shedding light on its financial performance.
Tesla’s strong profit margins have positioned the company favorably in the electric vehicle price war, exerting pressure on both traditional automakers and emerging electric vehicle startups. This success is reflected in Tesla’s stock performance, which has more than doubled this year, outpacing the broader market. Despite the challenges faced by traditional automakers in scaling up electric vehicle production, Tesla continues to demonstrate impressive results.
In specific markets, Tesla is offering cash rebates to new buyers who can provide a referral from an existing owner. For instance, in China, Tesla offers a rebate of 3,500 yuan ($483.69), while in the United Kingdom, buyers using a referral will receive discounts ranging from £500 ($639) to £1,000 ($1,278) depending on the model chosen. Tesla has strategically adjusted its pricing strategy over time, implementing price cuts in certain regions and increasing discounts on previously manufactured vehicles.
The record-breaking vehicle deliveries achieved by Tesla in the second quarter, surpassing market estimates, were facilitated by price reductions and the availability of US federal credits, rendering their electric vehicles more affordable. Additionally, the company achieved record deliveries of its China-made vehicles during the same period, further solidifying its position in the global electric vehicle market.