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Published on September 17th, 2017 | by James Ayre


“Super Helpful” California Car Dealers Association Expands Complaint Against Tesla Over Referral Program

September 17th, 2017 by  

The California New Car Dealers Association has expanded its complaint against Tesla in relation to the modern electric car pioneer’s use of customer referral programs. The California New Car Dealers Association has sent yet another letter to the state’s Department of Motor Vehicles explaining how cruel and unfair Tesla’s approach is.

The new complaint specifically addresses Tesla’s 6 newest referral program offers and alleges that the practice violates California state law.

This newest letter follows earlier ones sent in August 2015 and September 2013. The California Department of Motor Vehicles, for its part, is known to have sent Tesla a “warning letter” of sorts in September 2015 relating to certain company practices. Good thing the dealership association is so proactively looking out for California’s unfortunate residents.

Automotive News provides more: “The CNCDA claims Tesla’s various referral programs engage in ‘bird-dogging’ practices, enticing owners with incentives to act as unlicensed sales people. California law states that it is illegal for a company to offer rebates, discounts or commissions to anyone without a sales license on the condition that they sell, or aid in the selling, of that company’s goods.”

“Tesla continues to widely publicize its now years-long strategy to sell cars using current customers as the middlemen,” argued Brian Maas, president of the CNCDA, in the letter.

Oh, what a crime! How is it that this is still happening?

More seriously, that’s a bit of a strange way to interpret the situation, but I suppose that an argument can be made … sort of. Who would genuinely believe it’s a problem, on the other hand, is a bit of a mystery.

Tesla issued a statement in response: “This is just another example of car dealers trying to interfere with us and our customers. The regulations prohibit rogue car salespeople. Does anyone seriously think our customers are salespeople that the public needs to be protected from?”

It should be remembered, though, that it doesn’t matter if “anyone” believes that — only if regulators or legislators do.

The Automotive News coverage continues: “The program at issue in 2015 offered $1,000 for each new buyer referred by an owner, and new buyers would receive $1,000 off the price of a vehicle. Tesla received similar complaints about the same program in Virginia, and eventually modified it to offer the full $2,000 to the buyer.

“The most recent complaint lists six programs introduced this year, and claims the short duration of each offer is intended to avoid enforcement against illegal sales practices. One such program is referred to in the letter as the ‘Secret’ referral program, which allows owners to ‘unlock’ new levels of incentives with a certain number of referrals. Rewards include free supercharging, a $1,000 discount on a Model S or Model X and ability to purchase the next-generation Roadster — which has yet to be introduced — at a 10% discount.”

Notably, the California DMV has begun looking into the validity of the allegations in the letter, according to a statement from a spokesperson.

Here’s to hoping that they move onto something more important without wasting too much time on this, like perhaps going after auto dealerships for some of the fraud they seem to so often be involved in.

Images by Tesla Shuttle

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About the Author

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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