Who Killed The Tesla Referral Program? Video

JAN 22 2019 BY VANJA KLJAIC 56

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.

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56 Comments on "Who Killed The Tesla Referral Program? Video"

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Ben Sullins and other Youtubers ruined it for everybody else.

I cant believe Tesla is going to give him what.. 3 roadsters now?

Tesla should have been smart and capped the # of Roadsters that could be won via referral rewards to 1 per person.

Frankly, I’m glad some people have benefited handsomely, just like I’m glad early stock buyers have benefited. They deserve every bit of it, especially the hard working guys like Ben.

Ben gets paid for his “hard work” by Google. But exactly what hard work did he do in order to get referrals? He put his referral code on his channel. Did he give any test rides? Probably none. Did he directly speak with those who used his referral code? Bet not. What hard work did he do beyond what he already did on YouTube?

These “media influencers” already get invites to special Tesla, Space X and Boring Company events. They already get top treatment for their efforts on blogs and YouTube. But are they entitled up to $600,000 in prizes from a company that needs to make consistent profits? Nope.

Well, Ben has about 100k subscribers and while he has some popular videos, only one has a million views and 3 others also have over 500k. Most of his videos only have 20-60k views, so he probably only gets like $2,000 a month from youtube. Contrast that with 600k, or more in prizes from Tesla and he could stop making videos after the referral thing ends. I’d say for most Tesla/EV related you tubers and bloggers Tesla has become their main source of income. And there are tons of them. Fred Lambert gets 3, Paul Fosse from Clean Technica gets one and I guess there are a ton of others who I can’t find out and who are too ashamed to tell. And be honest here, do you think they get a lot of money for writing on EV blogs? And all those you tubers with 100k subscribers? Also no money in that. Sure Marques Brownlee is popular enough, that his free Roadster is just a nice bonus, but I guess for many those free prizes were a big bonus to continue writing, or making videos. Is it earned? I am not sure, but I guess if you give them… Read more »

Some of these Youtubers are complaining that they have to pay tax on these so they have to win more than one to off set. Boo hoo hoo… I rub my fingers for them.

Oh, my heart bleeds for them. Hey, if they don’t want to pay the taxes, I’m sure they can find plenty of people who will be glad to take it off their hands, people who would be very glad to only have to pay the taxes to get a new Tesla car!

From what I understand from other articles recently, it’s limited to two roadsters. I may be wrong, but other articles have definitely said that. But either way, that is at least one too many for any individual referrer.

Yes they did

I concur. Why would Ben Sullins want another Tesla after the way he cried about the issues on his early Model 3.

How far the Definition of “Friends and Family” has gotten! First with “Facebook”, now with the Tesla “Referral Program!”

Folks who never new the user of their code, after pitching it out on Blogs, Video’s, saw credits in their accounts, never even knowing the Buyer, before!

I blame Sullins and his ilk. Greed as usual spoiled the whole thing. Well done to Tesla for spotting it, albeit a little late.
All these Tesla this and Tesla that Youtubers who are supposed to be on Tesla’s side actually put their big greedy foot forward and gobbled up too much, as usual.

Greed? WTF do you want him to do, give up? I don’t see you giving away your assets and living like the people in third world, neither should Ben. Look in the mirror before you accuse others of greed.

It’s got nothing to do with that and you know it. Distorting what I said is a good tactic.
Not a problem doing the Youtube etc but every program they wanted, nay asked people to use their codes.

And btw, you have no idea what I do with my money so please do not presume.

You have the means to comment on EV forum, presumably having an EV (I’m guessing Tesla). People in third would would call that greed for having so much going by your ridiculous judgement.

If you’re going to accuse Ben of greed, let’s see you shed your greed. Give away your EV and all your possessions and earnings to live on $1 per day. Yeah, I thought you don’t.

Actually I cannot afford a Tesla yet. Waiting for Model 3 affordable which is my dream car.
Currently drive a Volvo v40, few years old do please stop goading.

“Look in the mirror before you accuse others of greed.”

Perhaps you should take your own advice. Fortunately, I have never in person met anyone who shows such disdain and contempt for the “common man”.

I know Tesla Bjorn has one multiple but he works his butt off and actually has really good content. He deserves it. So does the Now You Know team. However, some of these other Tesla vloggers like Ben Sullins, Tesla Girl… etc they are just doing it for the $$$.

I think the point is that it isn’t a referral, it’s a coupon code on the internet. Bj0rn doesn’t know 400-500 people a quarter.

That’s a good way to put it, yeah. Tesla’s referral program was supposed to encourage personal referrals, but it wound up being a coupon code on the internet.

But it’s Tesla’s own fault for making the rewards so wildly overblown. Once the magnitude of the error was clear, Tesla should have ended the program and re-started it with different rules.

Instead of “You get a free car with XXX referrals”, it could have been “If you get XXX referrals, your name goes into a sweepstakes drawing, which has (perhaps as many as) a dozen cars among the prizes!”

Maybe. If the referral program was useless after your 6th or 10th referral every quarter, then it would have had the effect of “I can’t find someone with a valid referral any more” and suddenly, knowing the owner community was the only way you’d get one. Couldn’t sit at home watching videos or reading blogs. Had to meet an owner. Alas, I don’t work in Marketing and have disdain for the people who do.

How do you know Ben doesn’t work hard? He recently gave up one of his channels because he got so busy. You don’t get so my referrals for doing little. He targeted his audience well and people like the content enough to use his code over others.

Ben Sullins is a Regurgitator. He takes info already available and just rehashes it. I don’t learn anything. Bjorn is a hard core tester. His last video where he crowns efficiency king was one of the best EV vlog videos I’ve ever seen.

“I blame Sullins and his ilk… Well done to Tesla for spotting it, albeit a little late.”

Don’t blame Sullins, et al.. Tesla knew full well about the flood of YouTube and social media referrals from the get go and condoned it. I wouldn’t be surprised if things unfolded exactly as Tesla planned all along.

Tesla tried cracking down on this and failed. Elon even tweeted about it. I think it’s safe to say Tesla did not think it through.

Well, to be honest here. They are jut the symptom. They made their channels/blogs about Tesla and got prizes as payment.

And it’s not like this just happened recently. They already got free Model X/S Powerwalls etc. So they probably kind of saw it as their payment for advertising Tesla.

Sure, Fred from Electrek getting 2 Roadsters, Ben Sullins getting 3 and all the others is a bunch of money. Probably a lot more than they would ger if they just lived from more random advertising in their videos and blogs.

But that was Tesla’s choice. They could easily reduce the high referral prices. There is no reason why those who get tons of referrals should get most of the high value prices, while referring 3 people you actually know doesn’t give you a lot.

This program complished its function, make a lot of publicity and comunication, without spend much money. But now Tesla is a bigger company and must use tecnics more sofisticated and accurate. It was a good idea, worked well, but now Tesla may think is time to step forward.

Actually, at this time, it really makes good sense for Tesla to start advertising. They need to be in the public’s eye.

Very strongly agree.

Superbowl ad. A Model S and an X do howling slides to stop side-by-side. Then a 3 slides in next to them. Door opens, helmeted person steps out, removes helmet, and, of course, it’s Musk. He smiles into the camera and says, “Do try to keep up.” Fade to black with a big Tesla logo.

👏👏👏👏👏👏👏👏

They won’t advertise until they really need to. The “no advertising needed because the product is so good” mythos is a powerful one. It would be a shame to ruin it prematurely. They will start buying ads one day, but it won’t be any time soon, I don’t expect.

A likely “soft entry” into the world of advertising would be for them to do sponsorships, particularly of high-profile one-off events. Paying toward a team doing a world record attempt, for example, or sponsoring a technology prize a-la the X-Prize. That kind of thing.

Traditional adverts will come much later.

The one thing that would force them to advertise in the traditional sense, however, would be losing Musk for whatever reason or his twitter account. His tweets may not count as adverts, but they certainly hit a lot of eyeballs and keep Tesla in the public eye.

No, it’s the time for Tesla to stop using paid marketing/ advertising, which is probably the main reason why they are choosing now to end the referral program. Model 3 shipments to Europe (and China?) are just starting, and it will be at least some months before they exhaust the backlog of overseas demand for the highest trim levels of the car.

Yes, Tesla did a poor job of structuring the program, and it most likely wound up giving out a lot more very expensive prizes than they had planned. But they could have ended the program sooner, and they chose not to.

It’s a double-edged sword, like a lot of things. One one hand, it has exposed many thousands of people to Tesla, some of whom would never have even considered an EV if it were not for Tesla. On the other hand, paying for customers “free” Supercharging, giving away solar panels, batteries, even entire cars(like Model S P100D, Roadster mkII) has cost Tesla a lot of money. I suspect that the program could come back in the future, but maybe without giving away entire cars, maybe other merchandise, with a maximum value of $5,000 would still convince people to work to get more people on board, but won’t cost Tesla a lot of money.

I would not be surprised if getting rid of the referral program for now, results in Tesla doubling profits, after all, they are already giving away 80 mkII Roadster’s, MSRP of $250,000, so there’s $20,000,000.

(⌐■_■) Trollnonymous

LMAO……
I knew it was going to get abused.

Personally I think they should give away EVSE’s or adapters and whatnot……

How many EVSE and adapters do you need?

Anyone who viewed YouTube videos by Ben Sullins and others were very likely going to purchase a Tesla anyway, so I doubt many “new” customers were created. Tesla should have known, as with any incentive program, be careful what you wish for.

That was the conclusion of a recent article that I read, but can’t find at that moment; that a lopsided majority of those using a referral code had already made the decision to buy a Tesla car. The conclusion was based on a fairly small sample size, but my guess is it’s probably a reasonably good reflection of the whole.

To that extent at least, the referral program was a failure and a waste of Tesla’s money.

I think the problem is also that they incentivized the use of a code (6 free months of Supercharging). I’m sure there were plenty of people plunking down money for a Tesla who were like “Well, I better grab one of those YouTuber’s referral code if I want some free charging”. They didn’t really care about giving someone credit.

Referral program is a form of marketing. Now that Tesla doesn’t need as many buyers since it is selling every copy it can make, then marketing needs to be cut back.

Referral program was started back in 2013 when Tesla almost “died within of weeks of running out of cash”. So, it is a good thing that Tesla is no longer desperate to need more customers.

Just about every Youtube video or online blog written positively about Tesla has a referral code at the end or bottom. So, all those positive media spins were done to promote Tesla. Now there are enough materials online to sustain itself. Tesla doesn’t need to “pay” for them anymore.

Tesla’s been selling every car it makes since inception. If you mean backlog, that’s been almost 3 years. Not quite sure why they continued the referral for so long but they have.

There was just a story that there are 3K Model 3s in the US, an educated guess to why the Tesla quietly deployed the previously unannounced mid range model 3 was the LR PUP equipped Model 3 demand in the US was coming to an end…The referral was most likely around in hopes that they can continue to sell the higher ranged/PUP equipped models…

I wish people would quit claiming that demand for one or another trim level of a Tesla model was “ending” when they mean it is plateauing.

There is a rather large difference there!

It has already plateaued…Musk reported that last quarter 75% of deliveries were non-reservation holders…

Because they waiting for the base

All consumer referral Marketing programs work by offloading the marketing costs until AFTER the sale is complete. They are paid out of future cashflow.

This is fairly unique in marketing. Advertisements are typically paid for before sales are made from that ad. And there is no guarantees an ad will even lead to sales.

This is why young companies still in high growth often choose referral programs. And why they often scale back these programs when they mature and become cashflow positive.

I don’t watch these YouTubers – they are normally advertising videos, even worse than advertising as they can lie and deceive without consequences.
For Tesla this kind of people is great, the cost of advertising this way it’s not that big, they deserve all the free cars they’ll get, not so much because of the referral per see, but because of the “free” advertising.

Agreed. Elon was a little knee-jerkey in just canning the program. No doubt nearly free salespeople and sales efforts can be a pretty damn good resource that almost any company would love to have. Tesla just needed to tweak the program some so it was harder or not even possible to benefit much without Tesla getting a commensurate benefit, for example:
-Limited number of referral credits per year
-Verifiable 2-way referable communication (emails, relatives, in-person store visits or delivery

Every legacy car dealer sale has a LOT more on the hood for all of the sales, advertising, and marketing costs than Tesla. The question is how much return does Tesla get for the expense. I supposed as long as they are production limited, it isn’t as much of a benefit but turning on and off isn’t a great idea either.

Tesla saves tons on advertisement dollars. So it could afford to do some sort of referrals. Cut out the abusers, not the whole program. But, what do I know, the random guy on the net.

Sosialism doesn’t work? Sosialism is supplying Tesla with one of its biggest markets in Norway. Get a grip, stop listening to right wing think tanks.

Yup. The sheer irony is astounding.
$200,000 cars.
“Influencers” in the gig economy (youtube).
A company with a market cap of $51.33B that’s made profit for less than a year of its life.
But socialism is clearly the problem.

tesla “influencers” getting too many freebies

Referral program is just not necessary anymore is the real reason. No one is buying a Tesla due to someone referring them. Companies I rent Tesla’s from on ski trips offered me $500 if I purchased a Model 3 before Feb 1 deadline. But my reasons for buying a Tesla have nothing to do with a referral from anyone and that is probably true for all referrals. Have to wonder if the referral program lead to any sales unless the original owner also offered incentives in which case it was the incentives which Tesla could do itself as other car companies do to move inventory, meet time specific sales goals etc.

Now when Tesla offers 0% financing as the other car companies due that’s an incentive.

Who?
People thinking blabbering about Tesla on youtube is a job.
And no, clicks are no sure sign of friendship.

Tesla wants to be an IT-company? And the can’t develop an algorithm for their referral program that prevents abuse? I guess Tesla should hire a psychologist. Wouldn’t be wasted money …

I hate the referral program, and I hate “influencers” like Ben Sullins (no better than Kardashians). But I’m going to play devil’s advocate, and also introduce some basic Business 101 lessons. Tesla does not do traditional marketing, so giving away these cars was simply part of their marketing expense. But Tesla should have been smart enough to cap it at 1 car per registered Tesla household. (Ie: if husband, wife, child each own a Tesla, and all live under the same roof, 1 free car).