July 29, 2015 / 8:20 PM / in 2 years

Tesla offering $1,000 referral bounty on Model S sales

Tesla founder Elon Musk arrives for the the annual Allen and Co. media conference Sun Valley, Idaho July 7, 2015. REUTERS/Mike Blake

DETROIT (Reuters) - Tesla Motors Inc (TSLA.O) will offer a $1,000 bounty to Model S owners and buyers who take advantage of word-of-mouth referrals of the electric cars, Chief Executive Elon Musk said Wednesday.

The referral bounty will be available to those who buy new Tesla sedans - and those who refer them - through October 31. Musk said the program, if deemed successful, could be extended to sales of used cars.

Such a referral program is unusual but not unprecedented among traditional automakers and their franchised dealers.

Musk, in a conference call with reporters, described the referral program as “a guerilla tactic against car dealers in certain states” that do not permit Tesla to sell its luxury electric cars directly to customers.

Tesla operates its own stores but does not use franchised dealers. Nor does it do traditional advertising and marketing, although Musk said the company may change that policy in the future.

Musk said it costs about $2,000 more to sell a Tesla Model S through one of the company stores than directly to the customer.

“If we can amplify word of mouth, then we don’t need to open as many new stores in the future,” he said in a letter to Tesla owners announcing the referral plan.

Under the program, buyers will get $1,000 off the purchase price and referring owners will get a $1,000 credit toward the purchase of another car or parts and service.

Musk said owners who refer 10 buyers will be able to purchase at a discounted price a limited-edition “Founders Series” Model X, the new crossover that is slated to go into production this fall at the company’s Fremont, California factory.

Reporting by Paul Lienert in Detroit; Editing by Jonathan Oatis

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