Tesla's customer referral program is no longer financially feasible

[Shawn Knight]

The big picture: Tesla's decision to kill its customer referral program is the latest in a series of adjustments that'll have an impact on the company's bottom line. It may not be a popular decision, especially among those that maximized the benefits of the program, but it'll become a reality regardless from February 1.

Tesla’s customer referral program is coming to an end. What started as a mutually beneficial perk to help Tesla spread the word about its product line while rewarding owners and buyers has morphed into a program that CEO Elon Musk says is no longer financially feasible.

Musk announced via Twitter on Wednesday that the referral program will end on February 1. In a follow-up tweet, the executive said the program was simply adding too much cost to its vehicles, especially the Model 3.

The Tesla customer referral program will end on Feb 1. If you want to refer a friend to buy a Tesla & give them 6 months of free Supercharging, please do so before then.

— Elon Musk (@elonmusk) January 17, 2019

Tesla earlier this month discontinued the 75 kWh battery option for its Model S sedan and Model X SUV, increasing the base cost of the EVs by $18,000 and $15,000, respectively. The company also recently trimmed vehicle prices by $2,000 to reduce the impact of an expiring tax credit.

Tesla’s referral program has gone through multiple iterations since launch, most recently offering new buyers six months of free Supercharging. Those who make the referral also get compensated – the more sales you make, the more handsome the reward. Prizes include custom wheels, priority access to vehicle software updates and invitations to Tesla unveilings.

Top referrers can even earn a free Roadster, Tesla’s upcoming vehicle that can accelerate from 0-60 mph in just 1.9 seconds.

Lead image courtesy Ivan Marc via Shutterstock

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https://www.techspot.com/news/78322-tesla-customer-referral-program-no-longer-financially-feasible.html

 

[Uncle Al]

Sounds like basic greed to me and God knows, Musk is no stranger to greed .....

 

[redgarl]

Sounds like basic greed to me and God knows, Musk is no stranger to greed .....

No, you got it backward, Musk is trying to save his company from bankruptcy. On that level, Musk is one of the few CEO to always try to challenge himself by putting everything on the table, even his personal wealth, which he did.

 

[Lew Zealand]

Just basic business, not greed. When you need to spark interest in a product, you offer incentives like this referral program. When demand is where you need it, cancel the incentive. This is Econ 101.

 

[FF222]

Sounds like basic greed to me and God knows, Musk is no stranger to greed .....

No, you got it backward, Musk is trying to save his company from bankruptcy. On that level, Musk is one of the few CEO to always try to challenge himself by putting everything on the table, even his personal wealth, which he did.

Except Musk did more for Tesla going bankrupt (for ex. with his irresponsible tweets about buyout, not respecting SEC; by not only allowing, but actually forcing an unproven "autopilot" getting tested in the hands of the consumers, etc) than any referral royalty program could do.

He's one of the worst company leaders in the world from the business perspective, and is only getting away with it, because of being able to burn through huge amounts of investor and government subsidy money, an because of the general hype around AI and self-driving cars, which however seem to be on the decline now, in large part "thanks" to him.