Ah, you can’t innovate at all these days without at least one state throwing up a roadblock, and this is especially true in the auto industry. Tesla’s new “secret demand weapon” that also throws a nice left hook into the jaw of auto dealers, as you should know by now, is a referral program where the Tesla owner referring a friend/family member gets $1,000 and the friend/family member gets $1,000 off the purchase of their new Tesla. Obviously, that just couldn’t fly in all 50 states.
Tesla Motors Club forum member “Bifff67” posted the other day that she or he received this email from Tesla:
Various states have laws that were enacted to prevent rogue car salespeople. You can imagine an era when legislators were concerned about stereotypical “car salesmen” trying to sell cars without a license. At Tesla, we sell our cars differently. We don’t use traditional car dealers let alone rogue salespeople. However, our Referral Program has struck a chord with Virginia regulators, who have claimed that aspects of it do not comply with this type of law.
Our Referral Program was never designed to make you a salesperson. Nevertheless, due to the position taken by Virginia regulators, we are making one change to our Referral Program for our customers in Virginia. Now, when someone buys a new Model S through your referral link, the $1,000 credit that you were to receive in your Tesla account will instead go to the person receiving the referral. That person will now get $2,000 (instead of $1,000) off the purchase price. The program otherwise remains as described in Elon’s email to you.
In other words, Virginia decided to be an ass and take away the $1,000 bonus for referrers. However, as some other members on the forum noted, this could actually be seen as improving the referral program….
The thing is, Tesla owners are already super enthusiastic and evangelical about their wonderful, record-setting, historic cars. They are happier with their cars than any other drivers in the US. They will encourage others to buy them, with or without incentive. Potential buyers who are on the line about the matter, however, could be tipped over the euphoric edge with an extra $1,000 in their pockets.
Furthermore, people are often suspicious (for good reason) of someone trying to get them to buy something when the referrer is benefit from the sale. (“Does Joe the pizza guy really think this is a good idea, or is he just eager to get $1,000 and perhaps a Model X?”) With that suspicion taken out of the equation, I’d presume more referrals come through than would have otherwise.
So, it seems Virginia may have shot itself in the foot… (if its overall aim was to slow the EV revolution). Some Tesla owners noted that they’d like to see Tesla change the entire referral program in this direction. I support the motion.