Tesla's Elon Musk to end customer referral program. Here's why
Tesla stock drops over missed delivery estimates, price cuts
"Bulls & Bears" panel discusses how Tesla shares dropped after missing delivery estimates and cutting the prices on all of its models by $2,000.
Tesla will end its customer referral program on Feb. 1. because it’s costing the company too much money, chief executive Elon Musk said in a tweet on Thursday.
The initiative allows customers to give their friends referral codes to get six months of free charging with the purchase of a Model S, Model X or Model 3, according to Tesla’s website. Participating drivers will then receive an award of their own, based on how many people they refer.
There will not be another referral system after this one ends, Musk said, because it’s "adding too much cost to the cars, especially Model 3." Drivers must refer friends before Feb. 1 in order to qualify.
Tesla has looked to cut costs this year. In June, the electric-car maker announced it was cutting 9 percent of its employees across the country as part of an organizational restructuring aimed at reducing costs and boosting profits.
But last quarter, Tesla posted its first profit in more than five years, recording adjusted earnings per share of $2.90 on net income of $311.5 million. Musk had previously vowed to achieve sustainable profitability by the end of 2018.
In early January, however, Tesla’s fourth-quarter deliveries, which fell slightly short of expectations, disappointed investors.
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And faced with the loss of a federal tax credit worth $7,500, the company slashed the price of all of its electric vehicle models by $2,000.