Tesla Adds US To Global Rebate Rollout As Elon Musk Chases Market Share Gains

Tesla  (TSLA) - Get Free Report shares edged higher Friday after the carmaker unveiled rebates for U.S. buyers, following a similar move in China, as the group continues to execute Elon Musk's focus on gaining market share over expanding near-term profits.

Tesla said U.S. buyers of a new Model 3 or Model Y sedan would receive a $500 rebate, as well as three months of Full Self Driving (FSD) access, when using a referral link. The person making the referral would earn 10,000 referral credits, Tesla said. 

Tesla also unveiled similar rebates in the U.K. and Hong Kong, as well as Germany, Canada, France and Mexico, following the launch of purchase incentives in China late Thursday. 

The moves come amid a drive by Musk to focus on growing sales volumes and extending its lead in key markets over improving profitability, a strategy he justified earlier this spring as a necessary step in its plan to generate recurring revenue, and longer-term earnings growth, from automated-vehicle sales over the coming years.

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Tesla shares were marked 0.5% higher in pre-market trading to indicate an opening bell price of $277.90 each.

Earlier this week, posted its best ever quarterly delivery tally over the three months ending in June, topping Street forecasts, thanks to improving demand in the U.S. and China.

Tesla delivered a record 466,140 new cars over the second quarter, the company said in a Sunday statement, up 83.5% from a year earlier and 10.2% north of the 422,875 tally reached over the three months ended in March.

Analysts' forecasts for deliveries ranged from 440,000 to around 450,000, with Refinitiv pegging the March quarter target at 448,000.

China sales likely formed a key component of the record second quarter tally, as China Passenger Car Association (CPAC) data showed said Tesla sold 677,695 cars over the month of May, a 2.4% increase from the previous month and 142% higher than the same period last year, when Tesla's Shanghai gigafactory was still under severe Covid restrictions.

China's EV sales could accelerate further into the summer months, as well, after state media reports suggested last week that the government would extend tax breaks for the purchase of so-called 'new energy' vehicles.

Tesla posted its thinnest quarterly profit margins in more than two years, linked in part to its relentless 2023 price cuts, with earnings falling 21% from a year earlier to 85 cents a share on revenue of $23.33 billion.

Tesla said it will publish its second quarter earnings on July 19, after the market closes. At present, analysts see June quarter earnings in the region of 79 cents per share, a 4% increase from last year, with revenues rising 42% to $24.1 billion.