Incentives have become a way of life in the auto industry, buyers often expecting givebacks and discounts on even the most popular products.
That’s a lesson little Tesla Motors has apparently picked up on. But the California battery-carmaker is adding a unique social spin to its first-ever incentive package, with a program designed to reward both owners and buyers. Separately, a new study suggests that some potential customers are getting around the high cost of a Model S sedan by turning to use versions.
In comparison to some incentive programs, Tesla might be accused of being downright stingy. It will offer $1,000 credit to a new buyer – but with a twist, you have to be referred by an existing owner who will also get a $1,000 spiff, apparently for a future purchase.
If anything, the program actually is designed as a test for Tesla to see if it can use social networking, rather than conventional marketing, to push its products. For now, the maker isn’t running mass market ads, though Musk said that it will eventually have to use some conventional advertising when it launches its more mainstream Model III in a few years.
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The new social networking push is designed to coincide with the launch of Tesla’s second product line, the Model X sport0-utility vehicle this summer.
And it should indicate just how effective Tesla can be with a distribution system that’s quite different from the way most automakers manage the retail market. Tesla has been setting up a small network of factory-owned stores, often in shopping centers and even pedestrian malls, rather than going with a traditional franchisee system.
“We’re just asking ourselves the question: How many stores should we open?” Musk said during a conference call. “And the key element of that is how does word of mouth compare to store-based sales?”
Tesla’s retail strategy has generated plenty of opposition from dealer groups, such as the National Automobile Dealers Association, which have convinced a number of states to effectively lock Tesla out.
Musk described the referral program as a “kind of guerilla tactic against car dealers in certain states.”
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Considering even a base Tesla starts around $70,000, the new incentives won’t even come close to providing a downpayment. So, some EV wannabes are looking at their own guerilla tactics, it appears, and are snapping up the first Tesla sedans to start going onto the used vehicle market.
A study of sales data by Edmunds.com found that 75% of those who have purchased a new Model S make more than $100,000 annually. That dips to around 64% for those who buy a used version of the sedan. The appeal could even grow, some observers suggest as more Model S sedans start to go back onto the used car market over the next few years.
The study also found that 10% of those buying a used Model S were under the age of 34, nearly twice the number of Millennials currently buying a new version of the battery sedan.
Tesla sales, overall have been on the rise, the maker claiming it delivered record numbers during the most recent quarter. That said, sales will have to pick up even more. The company delivered 21,537 for the half of 2015, less than 50% of its full-year target.
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