Tesla is about to shut down its popular referral program - and some owners are not happy about it

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Tesla is about to shut down its popular referral program - and some owners are not happy about it

elon musk

Mark Brake / Getty Images

Tesla CEO Elon Musk.

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  • Tesla will end its owner referral program on February 1.
  • The referral program has allowed Tesla owners to receive rewards based on the number of customers who use their referral code when buying a Tesla vehicle.
  • Some Twitter users and members of Tesla's online owner forums expressed disappointment that the automaker is ending the program.
  • Others defended the move.

Some Tesla customers are expressing disappointment as the automaker's referral program nears its end.

The referral program has allowed Tesla owners to receive rewards based on the number of customers who use their referral code when buying a Tesla vehicle. The rewards have changed over time, but the most recent ones included a home charging unit and the ability to receive software updates before other owners.

Tesla CEO Elon Musk said on January 16 that the referral program would end on February 1 due to its impact on Tesla's finances. He added that the automaker would not replace its current referral program with a new one.

"It's adding too much cost to the cars, especially Model 3," he said.

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Read more: There are only 2 things you need to know about Tesla's upcoming earnings

The move comes as Tesla seeks to prove it can become consistently profitable. The automaker posted just the third quarterly profit in its 16-year history during the third quarter fo 2018, and Musk has said the automaker's initial accounting indicates that it had also made a GAAP profit during the fourth quarter, though a smaller one than in the third quarter. But in a January email to employees announcing layoffs that would affect 7% of Tesla's workforce, he said the automaker faces significant challenges as it seeks to introduce lower-priced vehicles like the long-awaited $35,000 version of the Model 3 sedan.

"The road ahead is very difficult," Musk said.

Some Twitter users and members of Tesla's online owner forums expressed disappointment that the automaker is ending its referral program

"Bad move. Do you plan to spend millions on classic advertising now? The referral bonus was a nice gesture to the enthusiastic Tesla drivers which spend countless hours educating potential new Tesla customers," one Twitter user said.

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Others defended the move, saying they understood the financial benefits of ending the program.

"I think from the business standpoint the referral program made sense when the company was a small startup not known to everyone," said one user on the Tesla owner forum Tesla Motors Club. "But today when almost everyone has already heard of Tesla, when the company has surpassed many traditional automakers in valuation, when the Model 3 is outselling every other car in its class, what's the point of referral?"

Tesla did not immediately respond to a request for comment. 

Here's what people are saying about the end of Tesla's referral program.

 

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Have a Tesla news tip? Contact this reporter at mmatousek@businessinsider.com.

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