Or what killed it? Or a combo of who and what?
Let's be honest here. The Tesla Referral Program is a nice idea. But, just as communism, socialism, building a wall that other people will pay for, plus a whole slew of other items we encounter, it simply doesn't work in real life. And in the end, it's us humans who mess it up.
The idea with the referral program was simple: introduce friends and family into the world of Tesla, help them get perks, but also, earn perks yourself. And all of that is fine, really. But, like with most things that are nice and advantageous to us, we, as human beings, managed to find a way to screw it up. And with only a couple of weeks for the referral program left, Ben Sullins from Teslanomics dived into the reasons and culprits behind the end of the referral program.
In reality, the referral program is unsustainable. This became most apparent with the launch of the Model 3 when literally thousands of referrals were made. However, unlike the Model S and Model X, where Tesla has greater margins, with the Model 3, they are kinda slim.
It's just a matter of how things work in the business of making cars. BMW doesn't earn a lot on their 1 Series. Nor does Mercedes-Benz earn a lot on their A-Class. The same principle can be applied to everything from the Audi A1 to the VW Polo. They all are cheap, entry-level models where the manufacturer has thin margins. In turn, that puts these entry-level models at a bigger disadvantage when compared to the higher priced ones.
Too much was given to both to the person making the referral and to the ones using it
When Tesla started handing out up to $5,000 worth of prizes for referrals, combined with the advent of the Model 3, it was apparent the model and the map of things wasn't looking good. While free supercharging, smaller prizes like wall chargers, apparel and similar items may well be a thing that could be kept alive, other prizes - not so much.
For example, back in 2017, Tesla was giving away a ludicrous powered Tesla Model S or Model X P100D to anyone that referred 20 people in their respective regions first. The winners of this race were given a fully loaded vehicle, costing in excess of $120,000. And this was before the Model 3 made its way into the EV mainstream of things. Not to mention a slew of people that recently won an upcoming Tesla Roadster ... or two! Tesla will dole out some 80 free Roadsters due to the program. That's a nice chunk of change.
With the cheaper, more affordable and sold on a grander scale entry-level vehicle like that, the referral program became even more unsustainable, producing losses for the carmaker in general. But, if we're being frank, not even that was the main culprit behind the death of the Tesla referral program. Sure, it was a big part of it, but it wasn't the last nail in the coffin of it.
For me and a lot of other journalists and general petrolheads, the way the referral program was being misused is the biggest, if not the only major contributor, to the death of the program. While first envisioned as a way of helping the Tesla community, bringing family and friends over to the battery-powered revolution, it landed someplace else. Because, we, as humans, tend to destroy anything that's both nice and helpful to us. Thus, the idea morphed from that positive start into a rather negative aspect where commercialization of the whole program happened.
In the end, the referral program isn't going to work. Tesla may bring it back someday, but we'll never see cars and similarly priced items being handed over. I'm betting there's going to be free supercharging, apparel and similar items, but never something that cuts into the bottom line of the company on a grand scale like it happened here.
As stated earlier, Ben Sullins gives a more in-depth look in the video you can view above. While the referral ends soon, you can still use it and get something nice out of it. But, you need to hurry up as the referral program ends on Feb 1st, so there's not a lot of time left.