Tesla offers $1,000 referral discounts for Model S purchases

Article by Andrew Christian, on August 3, 2015

Tesla Motors Inc. will offer a $1,000 discount for both the referrer and buyer of the Model S sedan. This discount program, which will take effect through the end of October, will test how reliable viral marketing is in selling its electric cars.

This discount program will start as the automaker is preparing an assembly line for its new Model X crossover, also suggesting a wish to sustain the sales momentum for the Model S.

The automaker has established a delivery target of 55,000 units combined of the Model S and Model X in 2015. Tesla CEO Elon Musk characterized described the referral program as a test of an approach that could eventually eliminate the cost of setting up retail stores throughout the country. He shared that presently, Tesla spends around $2,000 to sell a car at one of its showrooms.

By using word of mouth, the cost could be lowered. Musk clarified that it is a “short-term experiment” but the company is attempting to come to a “long-term strategic decision.”

In this program, customers can get a new Model S online by clicking a link from a current Tesla owner. The buyer qualifies for a $1,000 discount while the Tesla owner who gave the link will receive a $1,000 credit toward service, Tesla accessories, or the purchase of another car in the future.

The automaker said that prizes will be given to the owners who have the links that are used the most. Among the prizes are a visit of the company’s new battery “gigafactory” in Nevada and the chance to purchase a limited-edition “Founder Series” of the Model X at a $25,000 discount.

The automaker is planning to start delivery of the Model X in the fall. Musk said that this referral program may be helpful in assisting the company with word of mouth in states where it hasn’t been able to open showrooms because of a requirement for franchised dealers.

He said that Tesla agents can’t sell in certain states but there’s no rule against salespeople referring this friends. He added that this is a “guerrilla tactic” in response to car dealerships in these states.

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