Rivian joins Tesla and Lucid with fresh referral programs

Electric vehicle startup Rivian Automotive has launched its first referral program to boost sales of its R1T pickup and R1S crossover, joining Tesla and Lucid Motors in offering perks such as free charging and vehicle discounts.

The Rivian program announced in August offers a $750 credit to both the Rivian owner who makes the referral and to the vehicle buyer using the referral code. Both also receive six months of free charging at Rivian Adventure Network sites, mostly near recreational areas on the east and west coasts.

Rivian said the program is only for U.S.-based owners for now, but will add Canada next year.

These "two-way" rewards programs offer a low-cost alternative to traditional advertising campaigns by legacy automakers with bigger marketing budgets, analysts said. The programs target friends and family members of Rivian owners, who are more likely to share their interest in EVs than the public at large.

"These programs appeal to automakers because they're quite simple to implement and therefore less expensive to run compared to other advertising methods," said Ivan Drury, an analyst at Edmunds. "Creating a program where both parties receive benefits also creates a win-win situation, which likely encourages greater participation."

The $750 in Rivian rewards can be used for merchandise at its online store, including apparel and vehicle accessories, or for a vehicle purchase, the automaker said. For the buyer of a new Rivian vehicle, the rewards are issued after the purchase and are not applied to that purchase.

"As a lifestyle heavy product, Rivian offering points redeemable towards Rivian gear has twofold benefits: Many of the branded products serve as additional advertising, and the perceived value of the branded gear is likely higher than their actual cost to make," Drury said.

The EV maker is also offering an "adventure weekend" for the first 100 owners who make 25 referrals, it said. Advertising dollars

Rivian started production three years ago and is far from a household name. The startup expects to sell about 57,000 vehicles this year, about the same as last year. Rivian mostly uses social media for its marketing efforts, including Instagram.

Rivian, Tesla and Lucid all sell directly to consumers, rather than through dealers. Some legacy automakers have rewards programs, often through credit cards, and some legacy-brand dealerships offer a cash bonus for referring a customer.

Tesla, whose referral program started a decade ago, updated it last month. It now offers a $500 gift card to owners when someone uses their referral code to buy a vehicle. The buyer receives an immediate $1,000 vehicle discount, excluding the Cybertruck pickup, the automaker said.

The $500 gift card for Tesla referrers can be used for merchandise in the Tesla shop, for a future vehicle purchase, software upgrades, free charging and vehicle service, the automaker said.

"For most consumers, these programs can be the ones that push them over the edge towards a purchase on a product that they're already debating on, effectively causing a pull-ahead effect for those on the fence," Drury said. "But it remains debatable whether these programs would truly convert the undecided, especially in the EV space."

Although Tesla has the profits to fund a robust advertising program, CEO Elon Musk has said he prefers word of mouth and limited marketing on social media, including YouTube.

Lucid, which like Rivian is losing billions of dollars per year, launched its first referral program in August 2023. It offers a vehicle discount of up to $1,250 for new buyers of the Air sedan, its only model. The discount starts at $750 for the base Air Pure trim and increases to $1,250 for the Air Grand Touring, the company said.

The referring owner receives points that range from 6,000 to 10,000 per referral, based on vehicle trim. The points are good for Lucid merchandise that ranges from 800 points for a sweatshirt to 8,900 points for a home charger, Lucid said. Lucid is also offering an exclusive tour of its Arizona factory for owners who amass 50,000 points, the company said.

"Referral programs, when conducted effectively, should help automakers convert existing customers from advocates to advertisers," Drury said. "And since birds of a feather often flock together, this audience should be similar to the target demographic that automakers are seeking with their product."