Tesla Launches Refer & Earn Incentives; 500 USD Cashback on Model 3, Model Y Purchase

A new initiative that allows purchasers to get additional incentives via recommendations from current customers was launched by electric car manufacturer Tesla on a worldwide scale. Traditional manufacturers have long utilized this tactic to increase sales.

For customers in the US who buy the Model 3 or Model Y, the incentive, which Tesla called “Refer and Earn” on its websites, is comparable to $500 in cashback. Additionally, three months of the Full Self-Driving capability is included in the U.S. incentives.

According to the regional websites of the firm, the program was launched on Friday in Tesla’s key markets, including the US, China, Germany, France, Canada, Mexico, Hong Kong, and Singapore.

A Reuters inquiry for comment on the refunds received no immediate response from Tesla.

Employee and loyalty discounts have long been employed by established automakers to reduce sticker prices.

Tesla has up to now concentrated on making real-time modifications to pricing shown on its websites after previously discontinuing the referral program because it was too costly. According to observers, it just brought back the referral scheme to increase sales.

The worldwide EV sales market has been more competitive, driving automobile manufacturers to lower prices or increase incentives in certain areas.

Elon Musk, the CEO of Tesla, stepped up the pricing battle in April, declaring that the business will put sales growth ahead of profit in a struggling economy and in the face of intensifying competition.

According to CFRA analyst Garrett Nelson on Friday, “Clearly, they’re doing everything possible to boost volumes and take market share.”

The main concern, according to Nelson, is on Tesla’s profit margins and the effects of the price reductions it has announced.

Margin issues still exist since the company’s inventory is still expanding, although more slowly than before, according to Chris Pierce of Needham. On July 19, Tesla is slated to release its second-quarter financial results.

The carmaker has used the EV pricing war as a tool to exert pressure on both established automakers and cash-strapped EV startups by using its sector-leading profit margins.

Tesla stock has increased by more than twice as much as the S&P 500 index this year, outpacing that increase by 15%. On Friday, the stock saw a little increase.

As conventional automakers try to implement ambitious development plans, ramp-up challenges with EV manufacturing are probably going to be common, Nelson added. Ford announced a 2.8% drop in second-quarter EV sales on Thursday.

Tesla said on Friday that it would provide new customers in China a cash refund of 3,500 yuan ($483.69) for purchasing a Model Y or Model 3 if they could provide proof of a referral from a current owner.

Many Tesla owners in China asked others to use their referral codes by posting them online.

Starting on July 7, customers utilizing a recommendation in the UK would get a discount of 1,000 pounds ($1,278.00) off Model S and Model X purchases. The Model 3 and Model Y discounts totaled 500 pounds.

Tesla, whose prices have been rapidly reduced since late last year, beginning in China, has delayed price reduction on its new orders but boosted discounts on its previously manufactured vehicles.

As price reductions and U.S. tax incentives helped make its electric cars more accessible, the manufacturer delivered a record number of vehicles in the second quarter on Sunday, exceeding market expectations. In the second quarter, Tesla also delivered a record number of its cars built in China.