Tesla has recently launched a new ‘Ownership Loyalty Program’ that comes with some deep discounts for Tesla owners, but it seems a little off-character for the Tesla brand.
Tesla does car sales a bit differently than your typical car manufacturer. Tesla doesn’t have independent car dealerships, or pushy car salesmen. Rather, Tesla does no-haggle pricing on it’s vehicles, and instead of dealerships they have showrooms and service centers. They replace pushy salesmen with Tesla Advisors who are there to answer questions about the vehicles and help customers place their orders online. The price you see, is the price you pay, for everyone (even Tesla employees).
So, what’s the new Ownership Loyalty Program, and what do you need to know about it? Tesla’s new Ownership Loyalty Program is an incentive program that offers about $6,000 in incentives to current Tesla owners when they trade-in their current Tesla for a new one. This program is currently only offered in China, where Tesla has the most EV competition.
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Tesla has notified current Tesla owners of all models in China, if they upgrade their Tesla by trading it in to Tesla directly they will get the following incentives, valid until September 30, 2022:
- Full Self-Driving (FSD) package at half price (~$4,750 value)
- 15,000 km of free Supercharging (~$500 value)
- Home Charging Service Package for free (~$1,200 value)
Important Note: The vehicle being traded in must have Enhanced Autopilot or Full-Self Driving package already installed in order to qualify for half price FSD on the new vehicle.
The email that went out to Tesla owners is shown below (courtesy of Ray4Tesla)
For more context, below is the same email loosely translated into English:
So What’s the Catch?
To qualify for the trade-in incentives, the Tesla owner must trade-in their vehicle to Tesla directly (not privately selling or selling to a third-party dealership). However, Tesla seems to be issuing “low-ball” offers on Tesla trade-ins. Private sale values are through the roof, and even cash offers from third-party dealerships are far higher than Tesla’s trade-in offers.
For example, I’m in the process of upgrading my 2019 Model 3 “Stealth” Performance for a new 2022 Model Y Performance. Tesla offered $39,800 for my trade-in, while two local dealers through kelleybluebook.com “Instant Cash Offer” offered $48,300.
Yes, if you trade-in to Tesla, you get a bit of extra savings on the sales tax, but Tesla’s offer still doesn’t come near the cash offers from Kelley Blue Book, especially if you don’t plan to buy the FSD at half-price.
Even if the Tesla Ownership Loyalty Program incentives were offered here in the US, since I don’t have FSD on my current Tesla, and I don’t plan to purchase it on the new one, I would still be getting a better deal by selling to a third-party dealer or a private sale.
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I wouldn’t fret about this ‘China only’ incentive. China has the most EV competition, so it makes sense. The US has no shortage of demand for Teslas, plus the bulk of the incentives are the half price FSD, so if you don’t have Enhanced Autopilot or FSD, or don’t plan on purchasing FSD, then the incentives are much smaller.