California auto dealers cry foul on Tesla's referral program

When Tesla announced its $1,000 referral program, it's possible that consumers mostly saw the novelty of the electric car company introducing its first modern incentive. At least two state dealer bodies, on the other hand, see competition. Tesla's program gave the new car purchaser a $1,000 discount and the referrer a $1,000 credit for service or a future Tesla vehicle. This caused the Virginia state regulator to rule against the program, citing a law against so-called "bird-dogging," which is when people who aren't licensed to sell vehicles are financially rewarded for helping sell a vehicle. Tesla changed the program so that only the buyer gets rewarded with $2,000.

The California New Car Dealers Association has cited a California state law prohibiting the same practice, and sent a letter to the state Department of Motor Vehicles, "asking the agency to crack down on Tesla's referral program," according to a report in Automotive News. The law being used is the 1968 California Motor Vehicle Sales and Finance Act, which opens with the proscriptive, "It shall be unlawful for any person to act as a vehicle salesperson without having first procured a license or temporary

As in the Virginia instance, Tesla says it doesn't believe state franchise laws should apply to the incentive program. The CA dealers sent the letter on August 26, now it's up to the director of the DMV to decide how to proceed. Even assuming the program gets tweaked in California as it did in Virginia, we can't imagine Tesla owners who no longer benefit from it will cease referring potential buyers to the company.

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