Tesla said Friday that it would offer electric-vehicle buyers in China a cash rebate if they could show a referral from an existing owner. It’s a sign of continued fierce competition in the Chinese EV market despite a public agreement between car manufacturers to end a potentially damaging price war.
Tesla
(ticker: TSLA) said new buyers could get a cash rebate of 3,500 yuan, or around $484, if they could cite a referral from an existing owner, according to a post on its Weibo account translated by Barron’s using online tools. The offer applies to its Model 3 and Model Y vehicles.
The move comes just a day after Tesla joined 15 Chinese car companies in a pledge to avoid abnormal pricing as regulators look to curb an ongoing price war. Tesla was the only foreign carmaker to sign the pledge. The rebate offer suggests Tesla is keen to find other ways to keep the pressure on its rivals in China, after applying a series of price cuts since late last year.
Tesla is the second-biggest seller of EVs in China, trailing local manufacturer BYD (1211. Hong Kong) but ahead of other companies such as NIO (NIO) and XPeng (XPEV), which were all also participants in the pricing pledge.
Analysts at Mizuho Securities wrote in a research note on Friday that Chinese EV sales in June were driven by discounts around the ‘618’ shopping festival, an event similar to Black Friday in the U.S. They estimated second-quarter sales of battery-powered electric vehicles in China were up 36% from the prior quarter.
“We believe the second half of 2023 could see continued incentives for consumers seasonally,” the Mizuho analysts wrote. They also raised their target price on Tesla stock to $300 from $230 with a Buy rating.
Tesla shares were off 0.4% on Friday.
Write to Adam Clark at [email protected]
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