Tesla Referral Program To End As Base Model 3 Comes Online

JAN 17 2019 BY STEVEN LOVEDAY 84

There’s been much animosity toward the Tesla Referral Program, and now it will go away.

Tesla CEO Elon Musk has announced via Twitter, that the infamous (or famed depending on your interests and situation) Tesla Referral Program will come to an abrupt end. This is not to say that there won’t be some re-initiation and/or adaptation of the program down the road, but for now, it will completely disappear.

We just recently shared a video from our friend Sean Mitchell. It talked about how Tesla owner support is the company’s number one asset. However, we’ve regularly questioned whether Tesla is, in fact, losing money by giving away stuff like free Tesla Roadsters to a myriad of YouTubers who may only publish videos and push their codes in order to benefit from the situation.

C’mon, some of these YouTubers already have two Roadsters coming their way, and they’ve canceled their initial reservations. It only makes sense that Tesla didn’t expect popular, hardcore YouTubers to work to secure two or more Roadster incentives via videos and followers. That’s definitely taking advantage of the situation, but we won’t name names.

Regardless of any unknown details, Musk says the program will go away at the end of the month. Keep in mind, however, that this could be much like any one of the many social media announcements from the outspoken CEO. Everything changes on a regular basis, and while some have come to accept that, others have not. Now that Tesla showed a profit in Q3, and we expect that it will show an even greater gain in Q4, perhaps it doesn’t need to referral program for continued success?

Tesla has been pumping its referral program perks for some three years. But, if the company is at a point that demand exceeds supply, then the program might not be necessary. As we’ve already seen, there have been times that Tesla, in its current situation, can’t even make enough vehicles to fill all orders. So, if that’s the case, dishing out incentives for referrals just makes the backlog even greater.

Let’s continue to keep in mind that as of the time of this writing, Tesla hasn’t officially announced this. Musk has been known to tweet official details that are then later changed. However, generally, his tweets are most often a precursor to an official announcement from the company.

Below we’ve included some followup tweets that were replies to the original message:

Do you think this is a good idea, or a terrible move on Tesla’s part? Let us know in the comment section below.

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84 Comments on "Tesla Referral Program To End As Base Model 3 Comes Online"

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At least from ending free charging point of view, it’s great news!

Some cheese with your continuous whine?

Something sweet to counter the sour grapes…

Why do you even care? It’s not like you have to wait in line at the supercharger with your Bolt…

Free charging SUCKS!!!!!!! Tesla or otherwise.

“Free” charging at the exclusive Tesla Supercharger network is the opposite of sucky. It’s a great perk enjoyed by many Tesla car owners.

What sucks is the way a tiny minority abuses the privilege by using it for everyday charging. But use of the Tesla Supercharger network is not actually free, since they did pay for the privilege of access.

I agree that free charging is a bad thing at public EV chargers, but Tesla Superchargers are not public chargers.

“A foolish consistency is the hobgoblin of little minds.” — Ralph Waldo Emerson.

I think they could lose some of their most prominent fanboys from this change, after all, that is the reason they like Tesla so much. It was also a nice reward to get your friends to buy a Tesla.

People always said Tesla doesn’t spend marketing money on Tesla. They really do, but in form of this referral program, not direct advertising. I am not sure what to think of this. I hope they realize it means spending money on marketing instead.

Tesla today looks a lot different than Tesla three years ago. Their growth has exploded and their brand is much more well known now. This might just be a break until Model Y is in production or they might never do another incentive program. We don’t know enough details to say either way or to guess at their marketing strategy moving forward.

Yeah, this could just be a temporary break in the promotional program, while Tesla has much more demand overseas than it can possibly satisfy for the next year… and probably more like two years or even a bit more.

Perhaps when Tesla’s production gets up close to demand again, Tesla will restart this promotional program.

I think it could be a clue that they want to switch their marketing budget toward advertising. I wouldn’t be at all surprised if they advertise the base Model 3 when it’s available.

There have been times when paid mass advertising would have boosted Tesla’s sales, but now is not one of those times. Not when they’re just starting overseas deliveries of the Model 3!

Actually, Elon has said years ago that Tesla will start advertising once production outstrips demand… That just never happened. (Though surely it will at *some* point in the future…)

I’m not so sure that production has never exceeded demand at Tesla. The temporary introduction of the software-limited MS60 and MX60, during 2016-2017, seemed to be a result of flagging demand, and a way for Tesla to boost sales.

I was surprised at the time, because I expected Tesla to start using mass advertising to boost sales, but Tesla apparently chose the new MS60 and MX60 instead.

At least, that’s my interpretation of events; it could be that Tesla had other reasons for the marketing ploy of the newer MS60 and MX60.

Tesla never said it doesn’t spend marketing money, just not on advertising. I could see that change with a mass market product like Model 3 though.

Yeah, I think it’s just Tesla fans who claim — wrongly — that Tesla spends no money on advertising. Tesla spends no money on paid mass advertising, but they do a lot of promotional events, and generate a lot of free advertising thru internet “buzz”, including Elon’s tweets.

No, Elon himself has said repeatedly that they don’t spend money on advertising. They do other kinds of promotion — as you rightly pointed out — but not advertising.

Nobody said Tesla doesn’t spend money on marketing. Everybody says Tesla doesn’t spend money on advertising. Marketing includes advertising but also a lot more.

Well, now some of the Tesla fan boys might quit on the Bolt forums! LOL!! I’m pretty sure they keep coming back just sell Teslas and to get referrals.

And what do you get for trolling Tesla threads?…

I’m pretty confident the most prominent fanboys aren’t just in there for the referrals.

(If nothing else, because most of them probably could make a lot more money through other means…)

Sounds like it’s needed to offset the reduction in price post full tax credit.
What is the link to the Base Model 3 as mentioned in the title?

And this statement is just plain stupid: “It’s adding too much cost to the cars, especially Model 3.”
It’s not making the cars more expensive, it’s reducing the revenue from car sales and supercharging sales, which will clearly affect the bottom line but does not change the cost of building a car.

There’s only one balance sheet. If it cost the company money , it’s reflected in the overall cost of the car.

Elon said it correctly and you are simply wrong.
Read his statement word by word!

Agree regarding the missing link with base Model 3… The rest is meaningless semantics.

I think they just need to limit perks so they don’t get out of control. I don’t think YouTube/Social Media/Web should be a valid way of generating a referral for the car. Truthfully they don’t have any dealers, so paying “commission” to people selling their cars doesn’t seem out of the ordinary. But, a referral should be a personal contact that involves physically experiencing the car.

Agreed, I had no idea that the rewards were that high. A far more modest reward system would still be very effective.

Another Euro point of view

Was it just announced that the base Model 3 was coming on line ? When exactly ? I completely missed that information 🙁

Another Euro point of view

OK, checked the news for base Model 3 coming on line and it seems that nothing of that sort is announced anywhere else nor in the body of above article. In that rainy January evening I wish I had a bit of what they are smoking at insideevs 🙂

InsideEVs should not print false headlines. When you say the referral program is ending as base Model 3 comes, it clearly suggests this transition happens on the same day, so Model 3 $35k version becomes available on February 1. Steven Loveday, if you have proof of this please show it!

Roy got it completely right.

Feb 1st. It ends when the base model comes online.

Yeah, I can’t figure out where that came from. Nothing in this article supports that assertion.

And yes, it does seem like someone at IEVs is smokin’ some good… stuff.

“Do you think this is a good idea, or a terrible move on Tesla’s part? Let us know…”

Whether it’s a good idea or a terrible one would depend on the cost/benefit ratio. How much does giving away a few cars cost Tesla, and how much do they benefit from the boost the program gives to “buzz” about Tesla on social media?

Presumably Elon has the numbers to show that ratio; we certainly don’t!

But I certainly hope that Tesla isn’t ending the program just because of a few Nattering Nabobs of Negativity whining about it! I mean, seriously, where’s the downside? Okay, so some people put their contest referral code in all the videos they make, and maybe even include that in the sig line of their social media posts. So what? How does that reduce the value of either posts to YouTube or posts on social media? I’ve been on e-mail discussion forums where most people participating had a sig line, and nobody ever complained about that.

Those who complain about this need to get a life, and stop looking so hard for things to feel offended about!

Note that Elon Musk answered your question about the cost/benefit: “It’s adding too much cost to the cars, especially Model 3”.

Right, the downside with the existence of the referral program is that all the folks patiently waiting for the base model (and there are plenty of them, clearly Elon doesn’t think there is a demand problem!) would have to cover the costs of future referrals (500 a car? 1000 a car?) when they buy their vehicle.

When Tesla wants to sell for $35K and make a profit, every bit of expense that can be cut is valuable!

Yes, I noticed that. But what Elon says in public about Tesla is what he wants the public to believe… not necessarily what is true. I admire Elon for many things, but his propensity for — to put it politely — putting spin on so much of what he says, isn’t one of those things.

Why would he claim it’s not worthwhile and cancel the program, if he believed that it was in fact worthwhile?… Makes no sense.

(Can’t argue regarding Elon being intimate with the spin in general, though…)

As has been pointed out in comments here, Tesla structured the promotion rather badly, so one person can (for example) win multiple new Roadsters. It’s quite likely that the program is costing Tesla more than intended, but that’s because they didn’t limit the prizes properly, and not because it hasn’t been a successful promotion.

But Elon isn’t going to admit that, now is he? No, instead he’s simply saying the promotion is “adding too much cost to the cars, especially Model 3.” While true, I seriously doubt that’s the entire story.

The fact that one person can get multiple Roadsters is the least relevant aspect. The few people this actually applies to is completely irrelevant. A much larger worry might be the significant discount towards the first Roadster a lot of people got. Though considering that only a fraction of those people will likely actually use it, and that Tesla is currently more focused on profitability in the near term, I’m not sure that’s the major worry either… The “regular” rewards might actually be a more serious issue.

This is clear indication that demand has increased.

Then why did they decrease all of their cars prices by $2000?

IMO they realized that reducing the base price of the car works better, than giving away benefits like free charging. They can also just reduce the price by 1k, which people got anyways with their referral.

“Then why did they decrease all of their cars prices by $2000?”

To help ensure that domestic demand won’t decrease even as overseas demand increases.

Tesla isn’t a helpless pawn of market demand. Tesla manages market demand using several demand “levers”, including price adjustments both up and down. I think Tesla is fairly successful in managing demand, altho obviously they can’t anticipate every market trend.

Well, Tesla is cutting their workforce by 7% and Elon admits, that they need to become cheaper. Profits have apparently also decreased.

So I am not sure if all of that really points to increased demand…

Tesla cuts its workforce every year, just as many or most large manufacturing companies do. And every year, the anti-Tesla pravduh dispensers churn out recycled anti-Tesla pravduh by suggesting this is a sign of trouble at Tesla.

As someone pointed out above, there is only one balance sheet. If Tesla is now spending more money on such things as expanding the Tilburg “final assembly plant” to handle the higher volume of Model 3s, and more expansions at Gigafactory 1, and further development of the Semi Truck, and the Tesla pickup, and if Tesla is gearing up to build the new Roadster…

There are a lot of things Tesla needs to spend money on that are not directly related to producing Model 3’s at the Fremont assembly plant. Probably a lot of those things got put on hold during Q3 2018, as Tesla worked hard to show a strong profit for the quarter.

You say “Profits have apparently decreased”? I say “Tesla is investing more in future growth.” It’s the same thing; it’s merely describing it as glass-half-empty or glass-half-full.

Or could be the program hasn’t really increased sales anymore. If everyone is getting the referral is already planning to get the car anyway, then there is very little incentives for it.

E for Electric guy is going to piss

Tesla: Hey, eveybody, help convince 50 people to buy one of our cars and we’ll give you a free sports car.
YouTubers: *do as they are being told*
InsideEVs: UGH! That’s definitely taking advantage of the situation.

Sorry, I don’t see that. I see that Tesla has made this an incredibly good deal (4000 $ per sold car is a lot) but I don’t think the referrers can be blamed for that. What Tesla might have counted on is a lot of normal people convincing 10 friends to buy a Tesla, get a rebate and still purchase most of the roadster. And even if they didn’t want to give away free roadsters, it would have been enough to have some kind of “fade out” of the value of the referrals (like: fist 10 are 2% each, next 20 are 1%, next 40 are 0,5% and so on). They are a company full of geniuses, they should be able to evaluate the scope of their marketing strategies. Please don’t blame the customers if you think they made a bad decision.

Also: What das Base M3 have to do with this?

The free roadster perk at 50 was certifiably insane. How that ever got approved is beyond me. Why did no one do the math on how expensive that would be? Make it 200 referrals for the roadster and it would be much more reasonable on a $/car level.

Pretty much what I was going to say, or you LIMIT the free Roadsters to one per person, first ten…

Yeah, it was pretty stupid not to limit that to one free car per person, at most. Perhaps even smarter would have been making it a lottery; if you get X number of referrals, then your name goes into a lottery in which there are a fixed number of cars to be awarded as prizes.

100% agree, Tesla deploys a referral system, apparently it worked too well? Really a huge mistake to getting rid of it and we all know they’ll probably bring it back perhaps around the end of a quarter…

If demand is now significantly higher than supply, then it certainly makes sense to end (or at least temporarily suspend) the promotional program.

I’ve been waiting for the base Model 3 – Please share the information teased in your headline; “Tesla Referral Program To End As Base Model 3 Comes Online”. Thank you in advance!

From article Elon Musk tweets said:

“Yes, ending on Feb 1. It’s adding too much cost to the cars, especially Model 3.”

“No, the whole referral incentive system will end”
—————

Wonder if more to story that triggered that?

If as Elon states rewards expense too high Tesla could have dialed down rewards benefits or increase threshold to receive the reward.

I’m surprised Elon would that definitively kill the entire referral program… rather than leaving it in place with at least a token “thank you” reward (such as Tesla shirt or Tesla mug) for referring… and leave option open to later target higher referral incentives as needed.

My hope is referral incentives will eventually come back in some form…

> keep in mind that as of the time of this writing, Tesla hasn’t > officially announced this. Musk has been known to tweet > official details that are then later changed. Come on, he’s being pretty explicit here; this isn’t a tweet about a flying roadster, this is a straight down the line change in company policy. He’s also clarified it and been even more explicit. This isn’t going to change. > Do you think this is a good idea, or a terrible move on Tesla’s part? Honestly, I’m pretty neutral about it. I think it’s probably positive for Tesla in the short to medium term term as it will remove costs without dampening sales by too much. Buyers probably won’t be too fazed by it; losing the six months free supercharging incentive won’t put many people off. People with referral codes who were hoping to get some of the rewards will be disappointed, but are unlikely to complain too much either unless they were right on the edge of getting the one they wanted. I expect Tesla to bring a referral program back again – maybe in a couple of years? – but in a revised form and… Read more »

Sloppy headlining as usual.

“Base Model 3 coming online”????
How about any Model 3’s of any spec/config here eh?

This is odd. I thought you could only refer a Model X or Model S or Powerwall/solar platform. For what it’s worth, I am annoyed that it has become an elite club for YouTubers and social media junkies who post their referral code like a hashtag. Some of us have done it long before the program existed, because we’re fanatics.

Elon just broke off a demand lever from his workbench. I would be curious to understand how it was too costly. Probably the expensive perks for all those internet stars, is my guess. Bj0rn, KMan Auto, etc… looking at you guys and your free Tesla’s.

Yes but if those folks are creating videos and doing some work/effort than its a fair trade.

You’ve obviously not lost a referral because it was “easier than contacting you for your code, why does it matter.” Yes, they contribute. Heck, Tesla started to crack down on them, it’s not like this is an unusual viewpoint.

Tesla is selling the 3 most popular BEV’s in the US, with the model 3 trending in the top 10 best selling passenger cars this year, they don’t need referrals at this point anymore to keep up demand.

Base Model 3 – will they drop the base price by $2K ($33,000) and have delivery before July 1, 2019, so I can get 1/2 the $7500 Tax credit?
I’m a day 1 reservation holder. Here’s hoping.

If I could take a Vegas bet, no possible way…You can’t even get a Model 3 without the $5K PUP which was quietly bundled into the price…

Frustrated NON EV owner!

Great news, cancel the referral program, remove the costly autonomous driving hardware and make a car I can afford and drive myself. The $35,000 TM3 does not exist yet but even when it does it is still too expensive for me in the UK. Lets get a full EV that looks like a Tesla, good interior to $20,000 or £20,000 new in the UK.

I want a Tesla, I love their mission but they are a pipe dream to me. Not all of us can benefit from referral codes, have a YouTube channel or a Patreon account to beg for money. I want an affordable EV with decent range (250 miles plus). You can leave the bells and whistle out.

Don’t worry. There will be used Model 3 for sale less than $20K. Make sure to learn lessons from this guy when buying used.

https://www.youtube.com/watch?v=H8ro6kpKlw0

Another Euro point of view

Saw that video, quite terrible. Not first time I read about terrible buying experience. I thought that the idea was that buying experience (used or new) would be heaven because of not having to deal with a dealership. Sounds like communism a bit. Taking away something from free market to do it in house. Then you have unmotivated clerks being a very tiny piece of huge machine who mess up the job while if I got it right dealerships are often family business with a very hands on approach on business. I believe there is no secret sauce for selling cars you can mess up with the Tesla model as well as you can mess up with the dealership distribution model. All reported terrible buying experiences at Tesla is a living testimony of that.

Only a serial Tesla basher would try to claim that the buying experience for Tesla buyers is not a vast improvement over the typical customer dealing with a legacy auto dealership.

And only a serial Tesla basher would use an outlier horror story anecdote and try to pretend that’s typical for those buying a Tesla car.

The saga continues, with a 2nd half to the Tesla Model X story.

https://youtu.be/AgMTx_xFezM

There’s third half where he actually gets to see and touch the blue X. Hopefully fourth half will deliver.

The hits (“third” quarter / “half”), they just keep on coming!

The Neverending Story may have met its match!

https://goo.gl/images/P966By

https://youtu.be/pxSQuGeoug8

+1 for the option to remove the autonomous hardware! If I don’t want to drive myself I’ll take an Uber.

I want a nice fast (base model is fast enough!) car I can have some fun when *I* drive, for an affordable price!

Not a surprise. How many $200K cars can Tesla afford to give away?

What is the meaning of the “Base model 3 comes online”?!

Another Euro point of view

Apparently no meaning at all. It probably qualifies as “words put together”.

Perhaps it means some IEVs editor was smokin’ something? 😉

I was so close, I only had 50 referrals to go, before I hit the Roadster 2.0 Jackpot!

St. Elon from All High, I now begrudgingly regard you as amongst the most venerated Vengeful Gods, which kicked my lofty Roadster 2.0 aspirations and dreams to the curb, so to speak.

Although no proof given about the coming base Model 3 SR in this article, I believe the end of referral program does have something to do with it. Approximately 30-40% of the initial US reservations were based on the SR, so if there is a line of 70,000 people in the US for that vehicle, they cannot continue with this program considering there will be another 70,000 or more who will buy it from seeing their neighbors.

This is good news for me since I am waiting for 35k. It may still be 6-10 months away to get a true $35k version, but once the SR w/PUP comes out, then the clock will truly start ticking for the absolute base model.

Its the right thing to do if the base Model 3 is going to be launched soon.

Even if the base 3 is still months away from production, I would expect that Tesla will announce and open the order books sooner than to allow people to place the firm deposits on the car (hopefully, the reservations from 2016 will be first priority). If the first base model rolls off the production line in June (just a guess on my part) they don’t want to have to price referral rewards into the cars in order to meet the gross margin targets.

Uncritical reception of those unnamed youtubers who get two roadsters for free by referral and their hypocrisy concerning the environement of unnamed blogs won’t make things better.

Great, hopeful the end of the endless YouTube and blog advertisers that are calling g themselves journalists

That’s hopelessly optimistic. The phenomenon of bloggers and amateur YouTube video makers calling themselves “journalists” didn’t start with Tesla, and if Tesla vanished overnight that would put only a tiny dent in the unfortunate practice.

I’d love to see journalism be a self-policing profession which requires a license, like doctor or lawyer or pharmacist. That might not put an end to such fake news outlets such as Fox News or Breitbart, but at least it would get them clearly labeled as fake news sources not employing real journalists.

Elon and team are looking at the Q4 2018 financial report that will be released the first weekend of February. I suspect they see something that means it is time to trim unnecessary costs.

As for YouTube authors, they have started to wander off the reservation with reviews of non-Tesla EVs. Not a good idea if you are working for a Tesla prize.

Interesting. My referral code has just been posted on the French site where I’ve configured my model 3. A they planning to use the program in Europe instead.

All these were foreseen by me! Nothing surprising!