Tesla Motors is looking to transform the owners of its electric vehicles into the company's sales team, offering a total of $2,000 for each car sold as a referral.
Elon Musk, the CEO of Tesla Motors, said that the company will be giving credits worth $1,000 to customers referred by owners of Tesla cars that will purchase the Model S electric vehicle. The Tesla car owners will also receive $1,000 worth of credits under the program, which will last until October ends.
In an email that Musk sent to owners of the Model S, the CEO said that the $2,000 that Tesla will lose for each Model S car that is sold under the program could possibly lead to lower expenses in the future for the company, as the referrals made by owners of its electric vehicles will help Tesla Motors build out a retail network that is smaller in size.
"If we can amplify word of mouth, then we don't need to open as many new stores in the future," Musk said of the experiment that will last for three months.
According to Musk, $2,000 is the average customer acquisition cost in the country, and that he would rather give the amount to its customers.
However, analysts believe that the referral strategy is simply a cash-back incentive to its customers that looks to boost the business of Tesla during a time when the company's luxury electric cars could be reaching their saturation point in the market of luxury cars.
According to figures from research company Autodata Corp., Tesla sold a total of 8,950 electric vehicles in the United States over the first half of this year, which is a slight decrease of 1.6 percent compared to sales figures from the same period last year. Sales figures have fallen for the company during a year that has seen sales in the automobile industry increase 4.4 percent, and currently on track to become the industry's best year since 2001.
"It signals that the first segment of consumers, the early adopters willing to pay a premium for an electric vehicle, may be coming to an end, or is slowing down at least," said Gartner VP Thilo Koslowski.
Automobile data company Kelley Blue Book analyst Karl Brauer believes that Tesla Motors is looking at having owners of its electric vehicles persuade assumingly likewise-affluent neighbors to purchase a Model S, as opposed to reaching into markets with lower income levels.
However, it remains to be seen whether credits worth $1,000 would have any appeal to such potential customers, who will have to pay about $100,000 to acquire a Model S.
Model S owners can refer up to 10 people in the program, which could take their credits to a total of $10,000. The credits will go into their account in Tesla Motors and can be used for paying service charges, buying accessories and even acquiring a new Tesla vehicle.