(Corrects range of price cuts in Japan in last paragraph to between 3% and 4%, not 3% and $5)
BEIJING (Reuters) - Tesla (NASDAQ:TSLA) on Friday said it would offer new buyers of its top-selling electric vehicles in China a cash bonus equivalent to almost $500 if they have a referral from an existing owner, deepening a price war in the world's largest market for EVs.
Tesla said it would offer new buyers of its Model Y and Model 3 vehicles a cash rebate of 3,500 yuan ($483) if they could cite a referral from an existing owner.
Tesla also said new buyers would have free access to its Enhanced Autopilot driver-assistance system for 90 days.
Since the start of the year, when it touched off a price war in China's EV market, Tesla has cut the base price of the Model 3 sedan in China by 14% and by 10% for the Model Y, its global best seller.
Tesla announced the rebate a day after joining 15 other companies, including Chinese EV makers Nio (NYSE:NIO), Li Auto and Xpeng (NYSE:XPEV), in a pledge organized by the China Association of Automobile Manufacturers to avoid "abnormal pricing", interpreted by some to signal a truce in a price war that had threatened industry-wide profitability.
Volkswagen (ETR:VOWG_p)'s China CEO Ralf Brandstatter said in a speech last month at an event attended by Chinese Premier Li Qiang that China's market for electric vehicles was marked by "high price discounts" and "an unhealthy competitive environment".
Tesla announced the cash rebates Friday on its Weibo (NASDAQ:WB) account. It is continuing an earlier offer announced in June of 7,000-yuan rebates to buyers of its more expensive Model S and Model X vehicles in China.
A number of Tesla owners posted their referral codes online and invited others to use them on Friday, suggesting the cash rebate could be widely available for new buyers.
Tesla sold a record 247,217 China-made vehicles in the second quarter, data released earlier this week showed. That was the highest since it started delivering vehicles from its Shanghai factory in early 2020.
Tesla's sales of cars produced in Shanghai in the second quarter accounted for over half of its global deliveries.
The company's shares have climbed almost 70% since early May, as investors reacted to indications its global price cuts and U.S. government incentives were boosting sales and bet the EV maker would be able to stabilize its profit margin over time.
While the price cuts by Tesla and rivals boosted sales earlier this year in China, those gains have started to slow in recent months, prompting local authorities to roll out more buyer incentives, including purchase tax breaks for EVs.
Earlier this week, Tesla cut prices on the Model 3 and Model Y by between 3% and 4% in Japan.
($1 = 7.2448 Chinese yuan)