Tesla is adjusting its marketing strategy in China, facing intense competition from local rivals and erratic demand in the world’s largest electric vehicle (EV) market.
According to a post on its Weibo account, the EV pioneer has increased insurance subsidies for new buyers by up to 8,000 yuan ($1,100).
It has also brought back a user referral program and advertised on a local TV shopping channel, which is unusual for a company that has been proud to avoid traditional advertising.
Most Recent Marketing Campaign
In its recent advertising push, Bloomberg reported that the carmaker recently gave select survey respondents the use of a Model 3 for a week in exchange for their suggestions of places where prospective purchasers might test-drive the vehicles.
In the past, clients had to go to a physical location, such as a showroom, to try out the vehicle.
As of last month, Tesla is again offering its customer referral program, which it discontinued in the US last year.
Owners in China who recommend their friends and relatives to purchase a Tesla receive small prizes like wireless headphones or strollers and an opportunity to win a visit for two to the Shanghai plant or the use of a Tesla for an entire year.
The company’s main store at Beijing’s Parkview Green retail mall was recently shut down.
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As it confronts some headwinds in China, from prolonged Covid restrictions to more aggressive local competition, Tesla slashed pricing throughout its Chinese portfolio in October for the first time in 15 months.
The automaker’s stock hit a two-year drop on Monday, Nov. 21, and has lost almost half its worth in less than two months on the back of concerns about the Chinese market.
Tesla doubled the Shanghai plant capacity to 1 million vehicles a year thanks to a recent expansion. Wait periods for automobiles in China have decreased to one week from 22 weeks earlier this year, indicating the firm is struggling to grow sales.
If the additional output is not sold, CEO Elon Musk may not be able to achieve his target of a 50% annual rise in worldwide sales.
Car Market Competition
As the carmaker announced lower-than-expected third-quarter sales last month, Musk pointed out that demand has been a bit tougher due to the downturn in China’s property market and the energy crisis in Europe.
Tesla delivered 71,704 vehicles from its Shanghai factory in December, down from a September record of 83,135.
BYD, which sold a record 217,816 vehicles last month, and startups like Nio and Xpeng are expanding in China, making it the world’s most competitive EV industry.
Almost 80% of electric car sales in the first seven months of the year were made by domestic automakers, as per China Passenger Car Association.
Local EV companies have also been successful at appealing to Chinese consumers by including karaoke systems and aroma dispensers. Budget-conscious drivers may choose from various automobiles offered by companies like BYD and SAIC-GM-Wuling.
Tesla is one of many luxury electric car makers offering discounts in China. Mercedes-Benz Group AG cut the price of two electric vehicle models by up to $33,000 amid sluggish sales.
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Written by Trisha Kae Andrada
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