Tesla has decided to pull on demand levers in China with the launch of a new referral program in the market and cutting prices on Model 3 and Model Y. The TSLA Stock price is down in pre-market.
Over the last few months, there have been increased concerns about softening of demand for Tesla vehicles.
It was enough for CEO Elon Musk to address it during the conference call following the release of Tesla’s Q3 2022 financial results.
The CEO reiterated that “Tesla doesn’t have a demand issue”:
I can’t emphasize enough, we have excellent demand for Q4, and we expect to sell every car that we make for as far in the future as we can see.
In terms of demand softening for Tesla, we reported earlier this month that Tesla’s demand shouldn’t be seen as a concern until Tesla starts pulling on some “demand levers” – meaning that the automaker takes some action to actually create some demand.
Now we are seeing the tide changing for the first time in two years.
One of the biggest demand levers you can pull is reducing prices, and that’s exactly what the automaker is doing in China.
Today, Tesla reduced the starting price of its Model 3 built in China to 265,900 yuan (~$36,800) from 279,900 yuan. The Model Y SUV in China also saw a price reduction to 288,900 yuan from 316,900 yuan.
Furthermore, Tesla has pulled another demand lever in launching a new referral program in China.
Now Tesla has launched a version of the new referral program in China.
The automaker is calling it the ‘”Treasure Chest” Points Rewards’ program. Like the previous referral program, Tesla owners can get rewards if new buyers order through their referral links. The new buyers also get rewards through buying through these new referral links shared through the Tesla app.
The only difference is that instead of directly receiving awards, like free Supercharging miles, both the Tesla owner and the person who made the referral receive “points,” which can later be exchanged for awards like in-vehicle software upgrades, Tesla accessories, or free Supercharging miles.
The points also enter Tesla owners into quarterly and annual raffles.
Here are the prizes for the first quarter 2023 raffle:
Tesla Texas Belt Buckle, worth 998 yuan, 89 copies in total
Tesla Model S stroller, valued at $5,999, five copies
The third-generation home charging service package (national standard 40 meters installation service), worth 8,000 yuan, a total of five copies
A 24-month right to use the in-vehicle software upgrade package “Fully Autonomous Driving Capability,” worth about 33,400 yuan, a total of one copy
And here are the prizes for Tesla’s first “annual sweepstakes”:
Tesla Shanghai Gigafactory VIP Visit Invitation Letter (with two immediate family members), worth about 5,000 yuan/person, five copies in total
The super charging mileage is 50,000 kilometers, worth about 24,600 yuan, a total of two copies
Three-year right to use new items in the Tesla boutique, up to a value of up to $45,000, one in total
Model 3 rear-wheel drive version or Model Y rear-wheel drive version of the vehicle for one year, worth about 47,500 yuan, a total of one
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Seventeen state attorneys general and DC are fighting a Trump executive order that froze permits and funding for all onshore and offshore wind projects on January 20.
The coalition is asking a federal judge to declare the executive order illegal and prevent the Trump administration from obstructing wind energy development. It was filed in federal court in Massachusetts.
New York attorney general Letitia James is leading the coalition. James said, “This arbitrary and unnecessary directive threatens the loss of thousands of good-paying jobs and billions in investments, and it is delaying our transition away from the fossil fuels that harm our health and our planet.”
Federal agencies have stopped issuing permits for wind projects across the board and even pulled the plug on the fully approved Empire Wind in New York, which was already under construction. Developer Equinor, majority owned by the Norwegian government, went through a seven-year permitting process and is considering separate legal actions.
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Massachusetts attorney general Andrea Joy Campbell said that Trump’s “attempts to stop homegrown wind energy development directly contradict his claims that there is a growing need for reliable domestic energy.”
The coalition argues that the action violates the Administrative Procedure Act and other federal laws because the Trump administration, “among other things, provides no reasoned explanation for categorically and indefinitely halting all wind energy development.”
Trump’s executive order puts billions of dollars in state investments at risk, jeopardizing everything from wind industry infrastructure to supply chains and workforce training that’s already well underway.
The coalition consists of attorneys general of Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, New Mexico, Oregon, Rhode Island, and Washington.
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Professional salespeople love to talk about “the steps of the sale,” a tried-and-true process that guides every customer from curiosity to closed. But when it comes to electric cars, that old-school hustle can fall flat, leaving dealers struggling with how to fit them into their familiar playbook. But what if I told you, dear dealer, that there’s a whole category of vehicles on existing dealer lots that need to be approached in exactly the same way as an EV to score a successful sale that you’re already familiar with?
That category: Heavy-duty tow trucks. Here’s how selling one is a lot like selling the other.
That’s right, greenpeas – selling a tow-rated pickup truck to someone who’s buying it primarily to haul a trailer, boat, or RV is a delicate thing that requires salespeople (and sales managers) to approach their customers with a lot more patience and empathy, and a lot less, “what can I do to get you to drive this home, today?” And, as we go through the whys and hows, I think you’ll agree that all the heavy truck selling wisdom we’re going to cover today will help you sell more electric cars, more often, and for more money.
1. Discovery is where the deal gets done
When it comes to heavy-duty tow vehicles, most smart dealers understand that their customer probably has a better understanding of their individual needs than they do – but it’s still a good idea to go over that understanding during the discovery phase of the sale.
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Has the customer factored in the weight of the trailer and the weight of everyone and everything else inside it? What about the weight of water, tools, or animals? Do they fully understand the concepts of GVWR and GCWR, and the difference between trailer weight and tongue weight? Will they have enough range, when fully loaded, on their standard fuel tank or will they need an aux. tank? What about the future – are they thinking about upgrading their RV or hauling bigger loads longer distances?
In other words, the customer has to trust that the vehicle they’re about to buy from you will meet their needs and fit into their lives today, while also meeting their needs in the foreseeable future. That’s what it looks like in a truck, but now apply that to an EV.
Has the customer mapped out the routes they take every day to make sure they can make the drive? That might sound ridiculous to you and me, but what if they’re depending on a single DC fast charger out on a rural stretch of highway to get the EV to meet their needs? What if they think 200 miles of range is 200 miles of range, but they like to drive 80+ mph (on Chicago’s I-290, that’s a minimum safe travel speed), do they understand that speed impacts range as much as weather?
Tools like Chargeway are great for helping dealers explain EV charging speeds, the impacts of speed and topography on range, and – especially in this era of NACS adapters – where buyers of used or off-lease EVs can charge up and get back on the road.
In either case, the salespeople who take the time in discovery to understand their customers’ needs and become consultative partners will make a sale, the ones who rush through the process won’t, and the ones who sell their customers the wrong thing will make a problem (if not an expensive lawsuit) for the dealership.
2. Options really do matter
When you’re selling a conventional ICE-powered crossover to a typical suburbanite, moving your customer up or down a trim level doesn’t typically impact their use case. Sure, they might have to keep their foot planted a little longer to get up to highway speeds or learn to live with cloth when they really wanted leather or vinylvegan leather, but they’ll still be able to get five-to-seven adults from point A to point B with the same general effectiveness.
That’s not true when it comes to trucks that are going to get put to work. There, the difference between one axle ration and another can have a huge impact on driver comfort, towing capabilities, and fuel economy – and going from a one-ton truck that’s just outside the customer’s budget to a half-ton that you happen to have on the lot could get someone seriously hurt or killed.
It may be tempting to switch the customer to a vehicle you have on the lot (especially if that vehicle happens to be an aged unit with a fat spiff on it), but the long-term pain isn’t worth the short-term gain on this one.
3. Information is your friend
This might feel like a duplicate of the discovery phase, but think of it as a member of the “measure twice, cut once” advice genre. That is to say that, sure – the customer thinks that new 5th wheel RV they have on order weighs 11,000 lbs., but does it? Did they add any options of features (see no. 2) that make it heavier? Get the information from the RV manufacturer or dealer and confirm as much as you can. That extra work will help keep your customer safe and build trust.
Similarly, you’ll want to verify your assumptions when it comes to EVs. Is that once-a-month 300 mile drive really 300 miles, or is it 330? Is there more than one charging option available on their preferred route? Is the customer able to make their trip without changing the way your they drive? Are they willing to change up where they stop, or for how long?
When it comes to EVs, especially used ones that came onto your lot as part of a trade deal that you may not be intimately familiar with, I cannot stress how much route planning apps like Chargeway or A Better Route Planner can help salespeople answer questions about electric vehicles confidently and correctly, generate trust, and drive referrals.
4. Aftersales support is critical
Successful salespeople follow up – not just with prospects who are still shopping, but with customers who have already bought. And, just as RVers know other RVers, RV salespeople who get positive feedback about a local dealer who takes the time to make sure their customers get the right truck know RV customers who might need a right truck of their own.
Yes, those RV salespeople might expect a $100 bird dog bonus to send their customers your way, but the money on its own isn’t enough. They have to know they can trust you with their customers, and you build that trust in steps 1-3, above.
The reason BMW is consistently pulling ahead? It seems to come down to education. “First-time EV buyers are receiving minimal education or training,” explains Brent Gruber, executive director of the EV practice at J.D. Power. “Dealer and manufacturer representatives play the crucial role of front-line educators, but when it comes to EVs, the specific education needed to shorten the learning curve just isn’t happening often enough. The shortfall in buyer education is something we’re seeing with all brands.”
And, if you’re still not quite convinced that you need to learn how to sell EVs to be successful on the sales floor, think again.
Overall, 94% of BEV owners are likely to consider purchasing another BEV for their next vehicle, a rate that is also matched by first-time buyers. Manufacturers should take note of the strong consumer commitment to EVs as the high rate of repurchase intent offers the ability to generate brand loyal customers if the experience is a positive one. In fact, during the past several years, the BEV repurchase intent percentage has fluctuated very little, ranging between 94-97%. This year’s study also finds that only 12% of BEV owners are likely to consider replacing their EV with an internal combustion engine (ICE)-powered vehicle during their next purchase.
Listen to an EV convert who has desked an awful lot of car deals, greenpeas – if you treat every EV customer the same way that crusty old fleet rep treats his truck buyers, you’re going to sell a whole lot of EVs. And, if you’re a brave enough little toaster to follow up and ask for that referral, you’ll find that EV buyers know other EV buyers.
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There’s no exact way to track Tesla’s inventory in the US, but there are ways to track Tesla’s Cybertruck listings. Sometimes, Tesla may have many vehicles with the exact same configuration at the same location and it will only publish a single listing for it.
Therefore, Tesla might have been sitting on more Cybertruck inventory.
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A month later, the number of listings in the US has skyrocketed to over 10,000 Cybertrucks, according to Tesla-Info.com:
This surge could be due to an actual net increase in Cybertruck inventory, but Tesla is also heavily discounting the trucks at varying rates, creating several different prices and, therefore, more listings.
At an average sale price of $78,000, Tesla could have almost $800 million worth of Cybertrucks.
Due to low demand, Tesla appears to have significantly slowed down Cybertruck production in recent months. Therefore, this surge is likely more about Tesla discounting the vehicles, exposing the broader US inventory, than an actual major increase in inventory due to more production.
Many of the Cybertrucks in inventory were built in 2024, so they are already at least four months old. Tesla still has ‘Foundation Series’ Cybertrucks in inventory, which it stopped producing in October 2024—more than seven months ago.
This is about as bad as it gets. Over 10,000 units account for about two quarters of Tesla’s Cybertruck sales.
It already looks like Tesla has slowed Cybertruck production down to a crawl, but I wouldn’t be surprised if it pauses it soon. The hard part for Tesla is to admit defeat.
The Cybertruck RWD using the same battery pack as the AWD was already a sort of admission that Tesla found the vehicle program to be too small to be worth being produced with two battery pack sizes. The automaker did the same with Model S/X when the program’s volumes shrank following the launches of Model 3 and Model Y.
It looks like under the current circumstances, Tesla will have issues selling more than 20,000 Cybertrucks per year in the US despite having planned production for 250,000 units.
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