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Should Tesla have ended its Referral Program?

Published

6 years ago

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Tesla’s long-running and generous referral program came to an end on February 2, with CEO Elon Musk citing too much cost to the company’s vehicles, especially the Model 3. The system that rewarded so many with so much was finally concluded, but should it have been?

Teslanomics host and Tesla owner-enthusiast Ben Sullins noted in a recent video that the electric carmaker maybe – just maybe – made the wrong decision when it retired its referral program. Tesla’s referral program actually compares favorably to initiatives of other carmakers like General Motors when it comes to return of investment, notes Ben in his analysis. Case in point: GM spent around $3.24 billion in advertising in 2017 versus its auto revenue of $146 billion during the year. This translates to a 45x ROI, meaning that for every dollar the automaker spent on advertising, GM got $45 in revenue.

Tesla, on the other hand, has not released the actual costs of the referral program, but considering the price of the approximately 160 free next-gen Roadsters that Tesla will give out, the Teslanomics host estimates the program to have cost Tesla around $32 million, at least considering the costs associated with the program’s most prolific prize. Compared with the $17.63 billion in auto revenue that Tesla reported for 2018 in its recent Update Letter, the company’s $32 million cost for the free Roadsters actually gives a healthy 550x ROI. This means that for every dollar Tesla spent on the referral program’s largest prize, the company received $550 back in return.

Ben also noted that among automakers in the United States, Tesla is among the ones with the least advertising spending per vehicle sold, at just around $106. This is lower than Porsche’s $161 advertising spending per car, and far below Volkswagen’s $1,211 spending per vehicle sold.

Ultimately, the Tesla owner-enthusiast concluded that it would probably be best for the electric car maker to bring back its referral program, though in a more balanced form. This would actually be a pretty good idea, considering that the story of Tesla’s referral system is a classic tale of a good idea that eventually became unsustainable in the face of growth. A great way to illustrate this would probably be a poll that Teslarati ran after Elon Musk’s announcement last month. Based on the results of our poll, the majority of voters were actually on board with the referral program’s retirement. 

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It should be noted that Ben and other social media influencers have helped spearhead tremendous word-of-mouth sales for Tesla, while also leveraging their following as a way to gain the necessary referrals to win the upcoming supercar. Some twice. Apart from this, the Teslanomics host’s computations for the rewards system only includes the price of the Roadster and doesn’t take into account other factors connected to the program, such as logistics, developments costs, and other time value costs involved in the production and fulfillment of prizes.

It would be easy to point fingers at who or what is really responsible for the end of Tesla’s generous referral program. It could be influencers who utilized their platforms of choice to refer dozens or even hundreds of new customers. It could also be the Model 3 owners, whose lower-margin vehicles practically flooded the system, rendering it unsustainable. Overall, the fall of the referral program is simply due to Tesla’s inability to balance its rewards system. Perhaps capping the prizes at a point (stopping at one Roadster would have been a great idea, or giving lower-tier prizes for lower-margin vehicles) would have solved the issue. Nevertheless, it would be up to Tesla now if it decides to roll out a similar, more balanced program in the near future.

Watch Ben Sullins’ take on the retirement of Tesla’s referral program in the video below.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Lifestyle

Elon Musk seemingly confirms Cybertruck gift to 13-year-old cancer fighter

Diagnosed in 2018 with a rare form of brain and spine cancer with no cure, the teen has undergone 13 surgeries by the time he was 12.

Published

3 weeks ago

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March 6, 2025

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Credit: Tesla

Elon Musk has seemingly confirmed that he will be sending a Tesla Cybertruck to 13-year-old Devarjaye “DJ” Daniel, a 13-year-old Houston boy fighting brain cancer. The teen was recognized as an honorary Secret Service member by U.S. President Donald Trump during his address to Congress on Tuesday. 

A Chance Meeting

The Tesla CEO’s Cybertruck pledge was mentioned during DJ’s short interview with CNN’s Kaitlan Collins. When Collins asked the 13-year-old what he told the Tesla CEO, DJ answered that he asked for a Cybertruck.

“I said, ‘can you do me a big favor, when you get back to Houston can you send us a Cybertruck down there?’” the cancer fighter stated.

Daniel noted that Musk responded positively to his request, which was highlighted by Collins in a post on X. Musk responded to the post with a heart emoji, suggesting that he really will be sending a Cybertruck to the 13-year-old cancer fighter.

Teen’s Cancer Battle Inspires

Diagnosed in 2018 with a rare form of brain and spine cancer with no cure, Daniel has undergone 13 surgeries by the time he was 12. During his speech, Trump highlighted the 13-year-old’s long battle with his disease. 

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“Joining us in the gallery tonight is a young man who truly loves our police. The doctors gave him five months at most to live. That was more than six years ago. Since that time, DJ and his dad have been on a quest to make his dream come true,” Trump stated.

Daniels officially received an honorary badge from U.S. Secret Service Director Sean Curran, to much applause during the event.

Surprisingly Partisan

While Daniels’ story has been inspiring, Trump’s focus on the 13-year-old cancer fighter has received its own fair share of criticism. MSNBC host Nicolle Wallace, while referencing Daniels’ love for law enforcement, noted that she is hoping the 13-year-old never has to defend the U.S. capitol against Trump supporters. “If he does, I hope he isn’t one of the six who loses his life to suicide,” Wallace stated.

Anti-Musk and Trump accounts on X have also thrown jokes at the cancer fighter’s honorary badge, with some dubbing the 13-year-old as a “DEI hire” that should be looked into by DOGE.

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Lifestyle

Tesla owner highlights underrated benefit of FSD Supervised

Published

2 months ago

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January 31, 2025

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Credit: Tesla

Elon Musk has been pretty open about the idea of FSD being the difference maker for Tesla’s future.

If Tesla succeeds in achieving FSD, it could become the world’s most valuable company. If it doesn’t, then the company would not be able to reach its optimum potential.

FSD Supervised’s safety benefits:

  • But even if FSD is still not perfect today, FSD Supervised is already making a difference on the roads today.
  • This was highlighted in Tesla’s Q4 2024 Vehicle Safety Report.
  • As per Tesla, it recorded one crash for every 5.94 million miles driven in which drivers were using Autopilot technology.
  • For comparison, the most recent data available from the NHTSA and FHWA (from 2023) showed that there was one automobile crash every 702,000 miles in the United States. 

FSD user’s tale:

  • As per an FSD user’s post on social media platform X, FSD Supervised was able to help him drive a relative to a medical facility safely even if he was exhausted.
  • During the trip, the driver only had to monitor FSD Supervised’s performance to make sure the Tesla operated safely.
  • In a vehicle without FSD, such a trip with an exhausted driver would have been quite dangerous. 
  • “This morning, Tesla FSD proved to be an absolute godsend. I had to take my brother-in-law to the hospital in Sugar Land, TX, which is 40 miles away, at the ungodly hour of 4 AM. Both of us were exhausted, and he was understandably anxious about the surgery.
  • “The convenience of sending the hospital’s address directly from my iPhone to my Tesla while still inside my house, then just a single button press once inside, and 40 miles later we were precisely in front of the hospital’s admissions area.This experience really underscores just how transformative this technology can be for society,” Tesla owner JC Christopher noted in his post.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Lifestyle

Tesla Optimus “stars” in incredible fanmade action short film

Published

2 months ago

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January 14, 2025

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Credit: @SoKrispyMedia/YouTube

There are few things that prove an enthusiast’s love towards a company more than a dedicated short film. This was highlighted recently when YouTube’s SoKrispyMedia posted a 10-minute action movie starring Optimus, Tesla’s humanoid robot, as well as several of the company’s most iconic products. 

The video: 

  • Shot like a Hollywood action flick, the video featured a rather humorous plot involving a group of thieves that mistakenly targeted a Tesla Model 3 driver. 
  • The Model 3 driver then ended up speaking to Tesla for assistance, and some high-octane and high-speed hijinks ensued.
  • While the short film featured several Tesla products like the Model 3, Superchargers, and the Cybertruck, it is Optimus that truly stole the show.
  • Optimus served several roles in the short film, from an assistant in a Tesla office to a “robocop” enforcer that helped out the Model 3 driver.

Cool inside jokes: 

  • The best Tesla videos are those that show an in-depth knowledge of the company, and SoKrispyMedia definitely had it. 
  • From the opening scenes alone, the video immediately poked fun at TSLA traders, the large number of gray Tesla owners, and the fact that many still do not understand Superchargers.
  • The video even poked fun at Tesla’s software updates, as well as how some Tesla drivers use Autopilot or other features without reading the fine print in the company’s release notes.
  • The video ended with a tour de force of references to Elon Musk products, from the Tesla Cybertruck to the Boring Company Not-a-Flamethrower, which was released back in 2018.

Check out SoKrispyMedia’s Tesla action short film in the video below.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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