Tesla Referral Program Prompts Formal Complaint Over 'Rogue Car Salespeople'

Tesla's business model is under scrutiny again. This time, California dealers say referral incentives amount to payment for selling cars.

Tesla Motor Co's Plant As Production Of The Model S Speeds Up
Noah Berger—Bloomberg via Getty Images

Tesla's referral incentives are under the microscope, following immense criticism of its direct sales model, according to a complaint filed by the California New Car Dealers Association to the California DMV. 

The complaint alleges that Tesla is using its customers as unlicensed pseudo-salespeople, according to Teslarati. California law prohibits car sales without a sales license in the state. Yet if you love your car, you're bound to tell people about how great it is - possibly even attempt to convince your neighbors and colleagues to go out and buy one. Sometimes friends like it so much that they too want to buy one.

Previously, referral incentives have come in the form of a Model S for kids, larger factory wheels, a power wall or even a free next-generation Tesla roadster.

A referral isn't just a one-sided game, either. The prospective new owner can also get $1,000 off the purchase of their Model S or Model X, and a lifetime of free supercharging at any of Tesla's charging stations. The Model 3 is ineligible for any current referral bonuses that Tesla offers its customers, however, possibly due to slim profit margins on the lower-priced configurations.

"This is just another example of car dealers trying to interfere with us and our customers," An unnamed Tesla spokesperson responded to the claim, "The regulations prohibit rogue car salespeople. Does anyone seriously think our customers are salespeople that the public needs to be protected from?"

Tesla has also had two separate formal complaints filed against it, both involving the manufacturer's business model. Only one of those complaints were acknowledge by the DMV, which issued a warning to the automaker for offering strictly monetary incentives in its "secret" referral program.