Latest Tesla referral programs draw new CA dealer lobby complaint


2016 Tesla Model S

2016 Tesla Model S

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Tesla has once again ruffled the feathers of the California New Car Dealers Association with a new round of referral programs.

The Silicon Valley automaker has used referral programs for years; they usually provide perks for current owners who get friends, coworkers, and colleagues to buy a new Tesla vehicle.

The dealer association has now noted six programs in a letter of complaint to the California DMV—its third formal complaint against the electric-car maker.

DON'T MISS: Those Tesla Customer-Referral Programs? They Really Work: Report

Tesla is accused of using its current customers as unlicensed sales personnel by incentivizing owners to attract new customers.

Under California law, a company can not provide incentives, rebates, discounts, or commissions to an individual who does not have a sales license, according to a report from Automotive News (subscription required).

The dealer association argues that Tesla's current and growing owner base is indeed being offered a handful of incentives to aid in the sale of its products.

2015 Tesla Model S P85D, May 2015 [photo: George Parrott]

2015 Tesla Model S P85D, May 2015 [photo: George Parrott]

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Tesla is using "secret" referral programs, the complaint said, to motivate its current customers with such incentives as $1,000 for the purchase of a new Model S or Model X.

Other programs include free Supercharger station use, and the ability to purchase the next-generation Tesla Roadster at a 10-percent discount.

Current owners can "unlock" new levels and types of incentives the more referrals they make.

READ THIS: Tesla Must Alter Electric-Car Buyer Bounties, State Law Says

"This is just another example of car dealers trying to interfere with us and our customers," said a Tesla spokesperson who required anonymity.

"The regulations prohibit rogue car salespeople," that person continued. "Does anyone seriously think our customers are salespeople [whom] the public needs to be protected from?”

This is not the first dust-up between the electric-car maker and the dealer lobbying group; Tesla has come under fire for similar referral programs in the past.

2015 Tesla Model S P85D, May 2015 [photo: George Parrott]

2015 Tesla Model S P85D, May 2015 [photo: George Parrott]

Enlarge Photo

In 2013 and 2015, the California New Car Dealers Association filed formal complaints about Tesla's business model, which itself is completely legal in the state of California.

Four years ago, Tesla was called out by the dealership association over the way prices were portrayed on its website.

Some of the company's practices, the group said, could have led shoppers to believe the automaker's product cost less than the suggested retail price.

For example, Tesla regularly used "net pricing" models that automatically included the $7,500 federal tax credit in the final purchase price.

CHECK OUT: California Car Dealers Slam Tesla For Website Pricing Tricks

The California dealer association was quick to point out only 20 percent of electric-car buyers actually qualify for the tax credit, per the Congressional Budget Office.

Another 2015 Tesla program awarded $1,000 to a current customer for referring a new customer, along with another $1,000 to be applied to the new customer's purchase.

The automaker changed that incentive to a straight $2,000 rebate for new customers after complaints arose in the state of Virginia.

The California DMV acknowledged the latest referral complaint but has yet to take action; the regulatory body had issued a warning to Tesla in 2015 over its practices.

EDITOR'S NOTE: This article has been updated to add comments from an unnamed Tesla spokesperson.

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