Published on March 22nd, 2019 | by Jennifer Sensiba0
Tesla’s New Sustainable Referral Program
March 22nd, 2019 by Jennifer Sensiba
Last night, Tesla announced a new referral program. Unlike the old program, this scaled-down program is something the company can afford while still being fair to all involved in a referral. That said, we still may be in for some pleasant surprises.
For those of you who didn’t read our earlier post on this, I’ll quickly go through the details on the new program. For every person you refer who buys a Tesla, both you and that buyer get 1,000 miles of free Supercharging. Additionally, you get a chance to win either a Founder’s Series Model Y or Founder’s Series Roadster. If you already have free Supercharging with your Tesla, you get two chances to win instead of just one. Model Y drawings are monthly, and Roadster drawings are quarterly.
Later in the night, though, we found out that the “chance to win” isn’t like getting a lottery ticket. According to Elon Musk on Twitter, the person with the most referrals worldwide at the end of the month or quarter wins the prize. The winner then gets reset to zero referrals and can never win that prize again. According to Musk, the idea is to “over time … enable those without a massive social media presence to win.”
Musk also clarified that people who already won a Roadster (or two) get to keep their points so far but are no longer allowed to win a Roadster. They are still eligible to win a signed Model Y, but they will go back to zero if they win. Unless other prizes are introduced later, they will no longer be able to win again.
Most Importantly, This Won’t Kill Tesla
While this is certainly less exciting than the old referral program that ended in February, it’s important to note that this new program is something Tesla can actually live with. The old program was costing Tesla far more than expected, and there was great potential for the program to cripple the company. In a previous piece on the topic, CleanTechnica’s Paul Fosse explained the issue:
Let’s play with some numbers. If Tesla sells 400,000 cars next year and every person uses a referral code from an owner who’s buying a Roadster, they would be giving up to $2 billion in discounts on 8,000 Roadsters. That is about double Tesla’s expected earnings next year. That would be a serious problem.
Now, that would only occur if the referrals were all given by a group of 8,000 super referrers. Tesla sold 245,240 vehicles in 2018. If those were distributed to 2450 super referrers, it would cost Tesla $1.2 billion in Roadster discounts. Instead, as you can see from this site, it appears they were distributed to about 75 people (myself included) who are likely to get about 100 free or heavily discounted Roadsters, costing Tesla about $25 million, or only about 2% of the potential cost. But I think 4 things worried Tesla:
- As time went on, more of the owners would unlock the secret level and cost the company significant money.
- The publicity of the bad actors and inequity of the benefits between the buyers & small referrers and the large referrers (like myself) would be bad for the brand.
- Giving away too many free Roadsters would hurt the image of that car. If it is to keep it’s exclusive allure, they can’t build and give away too many of them.
- Giving away free Supercharging encourages people to Supercharge instead of charging at home. This is not how the system is designed, and with many more Tesla’s hitting the road in the next year, it could cause overcrowding.
This new referral program has hard limits built in to protect Tesla. Tesla owners among CleanTechnica writers estimate that 1,000 of free Supercharging is worth about $75. That way, each Tesla sold through a referral only costs the company about $150. This is in-line with what you’ll get from a car dealer for referring a friend to buy a car. Additionally, Tesla is only giving away one Model Y per month and one Roadster per quarter. This means the company can’t be put in the absurd position of giving away far more than they earn in the future, while still doing something nice for the referrers and buyers.
One More Thing
There’s still one very, very important thing to note about the new program. In the past, Tesla had secret levels to the program. After getting a few referrals, new rewards would unlock. While Tesla isn’t likely to do anything as extravagant as a new Roadster this time around, we don’t know what could be waiting for people getting a lot of referrals in the new program. Dinner with Elon Musk? Invites to unveilings? Membership in the Jelly of the Month Club? (Hey, it could happen).
As more owners work to get referrals, maybe we’ll find some cool secrets!
To thank Paul for letting me shamelessly copy and paste part of his article here, I’d like to invite the readers to use his referral code: https://www.tesla.com/referral/paul92237 . Plus, the sooner one of us gets more referrals in, the sooner we can let you know about any secret levels there may be.