Tesla Motors Inc (TSLA) Offers $1000 Referral Incentive to Model S Customers

The owner gets the “cash” as a Tesla credit toward future purchases or service charges, and the purchaser gets , 000 off the price of the vehicle.

According to Musk, every new Tesla Model S sold in its Tesla Stores costs Tesla an average of about $2,000 once building fees, operational costs and salaries have been taken into consideration.

On Wednesday, Elon Musk, the chief executive of Tesla Motors Inc. announced that the electric-car maker will offer $1,000 to buyers of its Model S. The new update will enable the Model S auto to steer by itself on motorways so that the drivers may just sit and relax.

Tesla operates its own stores, but does not use franchised dealers.

Even better, the first person to refer ten friends who purchase a Model S will get a Model X for free. Five referrals that result in purchases get you and a guest a tour of the company’s giant battery factory now under construction in Nevada.

Earnings: Analysts polled by FactSet expect Tesla to report an adjusted loss of 60 cents a share in the second quarter, which would be its third consecutive quarter without an adjusted profit.

In an email to customers, reported by The Verge, Musk said the referral program could reduce Tesla’s costs by $2,000, meaning it can return the money to buyers.

Musk’s Tesla Model S program is the first sales strategy that eschews traditional advertising and dealer networks. “If not, we’ll say “that was a great experiment” and move on”. From the amount, $1,000 will be given to the new customer as a discount and $1,000 will be given as credit to the Model S owner that made the referral.

Tesla’s customers – many of them loyalists who spend hours chatting about the company online and organize a yearly users conference – are among the fiercest advocates of the brand.

Musk said: “If we can amplify word of mouth, then we don’t need to open as many new stores in the future”. The company believes that word of mouth would sell its pricey cars, and it wants to attract more buyers with an incentive scheme.

The engine of the 2016 Tesla Model S will have the same electric motor as its predecessor to power the rear wheels with a limited skip differential.