Tesla has started rolling out a special incentive for its customers in Shanghai. With the incentive in place, customers who are ordering and purchasing the company’s domestically produced Model 3 and Model Y are given shopping vouchers worth 3,000 yuan ($420).
The incentive is offered in conjunction with a local government incentive program that’s designed to boost consumption. The $420 voucher is quite interesting as it’s likely enough to purchase a fairly decent amount of items.
Tesla China has also noted that it would be providing new car buyers with 3,500 yuan in cash ($487), as well as a free Enhanced Autopilot trial if they were referred by an existing Tesla owner, as noted in a Bloomberg News report. This incentive program remains active, the company noted when it announced its $420 shopping voucher offer on Wednesday.
China is the world’s largest car market, and it is also the world’s leader in electric vehicle sales. So far, retail sales of new energy vehicles for 2023 totaled about 647,000 in July, as per data from the China Passenger Car Association (CPCA). Tesla China, for its part, delivered 93,680 vehicles from Giga Shanghai in June, which included 74,212 units that were sold in the domestic market.
China’s auto market is extremely competitive, and even Tesla, which is arguably the world’s leader in pure electric cars, is outsold by Chinese automaker BYD in the country’s New Energy Vehicle (NEV) sector. While this is largely due to BYD’s NEV sales including hybrids, its large gap with Tesla’s pure battery electric car sales hints at the steep competition in the Chinese auto market.
As a means to become more competitive, Tesla opted to roll out aggressive price cuts to its vehicles earlier this year. Tesla ended up starting what could only be described as a price war in China, which culminated about a month ago when the EV maker, together with several other local automakers, signed a pact that committed to avoid “abnormal pricing practices.” The pledge was retracted eventually, but authorities still encouraged fair competition among automakers nonethelesss.
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