n an effort to boost its auto sales, and to circumvent states with dealer franchise laws, Tesla Motors announced it will test a new social referral incentive program running through October 31, 2015.
Since Tesla doesn’t work with dealerships, and runs afoul of dealer franchise laws by selling directly to consumers in states like Texas, it has decided to test a referral program that passes the savings onto consumers.
According to Tesla Motors (TSLA) the cost to sell a car through one of their stores runs about $2,000 in building and operational costs. The referral program allows current Tesla owners to share a link with friends which will give the referral $1,000 off the purchase price when they order a new Model S before October 31. It also gives the current owner a $1,000 credit off their next purchase.
In addition, anyone making five referrals gets an invitation, along with a guest, to attend the Tesla Gigafactory grand opening brouhaha. If you hit ten referrals you get the option to purchase a new, fully-loaded Model X at the base price which amounts to a savings of about $25,000.
For Tesla Motors investors the question is will this move help achieve the company’s goal of 500,000 vehicles sold by 2020, of which 350,000 are forecast to be the more affordable Model 3 series which begins sales in 2017? Tesla reported sales of 10,030 vehicles in the first quarter of 2015.
With these numbers, they are going to need a lot of referrals.