Should Tesla Offer More Loyalty Promotions to Current Tesla Owners?
Tesla is incentivizing current Model S and Model X owners to upgrade: would it be beneficial for the automaker to continue offering loyalty promotions, particularly for early adopters of new technology?
Supercharging Incentives
Tesla has offered varying levels of Unlimited Supercharging promotions.
Vehicles produced in 2016 and prior that were sold with free Unlimited Supercharging included the incentive for the lifetime of the car.
Beginning on January 1, 2017, Unlimited Supercharging faced a change in policy.
Initially, Tesla transitioned over to only including a certain amount of Supercharging credits per year with the purchase of a Tesla.
This became 400kWh of free annual Supercharging, which converts to roughly 1,000–1,500 miles depending on driving conditions and efficiency.
Then Tesla intermittently offered Unlimited Supercharging again, as recently as a promotion in 2020 for new Model S and Model X vehicles and even on Model 3 Performance previously, but with a significant change:
Unlimited Supercharging only applied to the first owner of a vehicle purchased from 2017 and on, making it no longer transferable to subsequent owners.
2023: Trade Supercharging Miles for $5,000
Now, Tesla is issuing a proposition to early Tesla Model S and Model X owners with Unlimited Supercharging:
Exchange unlimited free Supercharging miles for $5,000 in trade-in credit towards a new Model S or Model X.
Considering the value of Unlimited Supercharging, forgoing it may hold some owners back from upgrading. Despite receiving an additional $5,000 in value, Unlimited Supercharging remains a unique value proposition.
Tesla doesn’t currently offer Unlimited Supercharging in any capacity, and these existing vehicles are the only option to be grandfathered into it today.
Owners constantly using Tesla’s Supercharging Network for long-distance travel may find that keeping Unlimited Supercharging is more convenient, even if they would find themselves using around $15 in energy to charge a Tesla from 20%-80% at a Supercharger.
Unlimited Supercharging: Transfer to a New Tesla?
Thus, we propose that it may be more favorable for Tesla to offer owners of vehicles with coveted Unlimited Supercharging a promotion to transfer Unlimited Supercharging access to their new Model S or Model X.
While this isn’t a present-day option, it may make more sense in our opinion to incentivize upgrades.
Elon Musk finds Unlimited Supercharging to be unsustainable due to cost and utilization, which is fair and Tesla may be phasing it out, but also potentially dissuades early adopters from an upgrade.
What About a Loyalty Incentive?
Several automakers, with the most significant incentives being offered by BMW and Volvo, offer loyalty rebates that encourage current vehicle owners of the brand to upgrade to a new vehicle.
Essentially, current brand owners upgrading to another vehicle produced by the same brand can provide an incentive of around $1,500-$3,000 on average for makes and models that offer a loyalty program.
Tesla’s enhanced trade-in value is the first such example of this, and Tesla may not be characteristically willing to label it as an incentive as the automaker keeps pricing transparent and direct without the use of rebates.
We believe that Tesla should figure out incentives that the automaker can offer to loyal owners via its app, much in the spirit of its referral program, if they don’t offer promotions via the new vehicle configurator.
Wild Card: Full Self-Driving Early Adopters
Owners of vehicles equipped with Full Self-Driving should possibly be offered an incentivized upgrade path in the future, as Tesla won’t offer retrofits to new hardware and the finalized software is taking longer than expected to be released.
Full Self-Driving buyers are the ultimate early adopters, purchasing an autonomous feature suite that was announced and offered for sale in late 2016 with little more than a promise and a staged demonstration video.
It could provide goodwill to these customers, even if Full Self-Driving is tied to the vehicle and transferable to subsequent owners.
Many Tesla owners may be swayed by Hardware 4.0 and future Full Self-Driving hardware upgrades, which will necessitate a new vehicle.
Perhaps offering a discount on Full Self-Driving for Tesla owners that are upgrading could go a long way, but Tesla may find more creative outlets to further reward early adopters.
Conclusion
Tesla should continue experimenting with loyalty incentives and promotions, taking additional steps to incentivize upgrades among its earliest adopters and most enthusiastic customers.
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