Tesla Hits Reverse In Virginia: Referrals Aren't As Legal As Everyone Thought

August 11, 2015

A couple of weeks ago, we told you about Tesla's new incentive plan, which promises current Tesla owners $1,000 in services or goodies if they convince their friends to buy a Tesla Model S before October 31 (at a $1,000 discount, no less). Turns out, the company is having to roll back that program in Virginia.

Tesla CEO Elon Musk described the incentive program as an "experiment". The company spends around $2,000 to sell a vehicle through its showrooms, once it pays for labor, space rental, and the like. Musk and his marketing team want to see if spending the same $2,000 on current and new customers could yield similar results -- or even better ones.

The program is also a cheeky way for Tesla to flout restrictive state laws that often require automakers to sell their vehicles via franchisees. As Musk himself noted, Tesla may not be able to sell directly to consumers in states like Texas, but there's no law that prohibits referrals.

Except, there kinda is, at least in one state. 

The Commonwealth of Virginia has laws to prevent the practice known as "bird-dogging". Bird-dogging has a lot of different meanings depending on context, but in this case it refers to consumers who aren't licensed to sell cars receiving compensation for doing so. In Virginia, if you want to get paid to sell a car that isn't yours, you've got to have the proper license.

When Virginia auto dealers got wind of Tesla's compensation program, they immediately contacted state regulators, who told Tesla that compensating someone for getting her friend to buy a Tesla was a no-no.

Of course, the bird-dogging law doesn't prevent Tesla from spending the referrer's $1,000 on the buyer. And so, Tesla has changed its program in Virginia to give referred buyers a tidy $2,000 discount on their new Model S sedan (simultaneously giving the state's auto dealers association a couple of crude hand gestures). Hopefully, the lucky buyer will at least take her friend out to dinner as a way of saying thanks for the dough.

And it appears that referrers will still be eligible for prizes from Tesla, like tours of the company's gigafactory and a $25,000 discount on the "Founder Series" edition Tesla Model X crossover, which should begin arriving in driveways just after the referral promotion wraps up. So, if you're a Tesla owner in Virginia, keep sending out those referral links.


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