Electric vehicle startup Rivian Automotive has launched its first referral program to boost sales of its R1T pickup truck and R1S crossover, joining Tesla and Lucid Motors in offering perks like free charging and vehicle discounts.
The Rivian program announced in August offers a $750 credit to both the referring Rivian owner and the vehicle buyer using the referral code. Both also receive six months of free recharging at Rivian Adventure Network locations, primarily near recreational areas on the East and West coasts.
Rivian said the program is only for U.S. owners for now, but will add Canada next year.
These “two-way” rewards programs offer a low-cost alternative to traditional advertising campaigns from legacy automakers with bigger marketing budgets, analysts said. The programs target friends and family of Rivian owners, who are more likely to share their interest in EVs than the general public.
“These programs appeal to automakers because they are fairly 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 benefit also creates a win-win situation, which is likely to encourage greater participation.”
The $750 in Rivian rewards can be used to purchase merchandise from its online store, including apparel and vehicle accessories, or to purchase a vehicle, the automaker said. For the buyer of a new Rivian vehicle, the rewards are issued after purchase and are not applied to that purchase.
“As a lifestyle product, Rivian offering points redeemable for Rivian gear has two benefits: Many of the branded products serve as additional advertising, and the perceived value of the branded gear is likely higher than its actual manufacturing cost,” Drury said.
The electric vehicle maker is also offering an “adventure weekend” to the first 100 owners who make 25 referrals, it said. Advertising dollars
Rivian began 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 primarily uses social media for its marketing efforts, including Instagram.
Rivian, Tesla and Lucid sell directly to consumers, rather than through dealers. Some traditional automakers have rewards programs, often through credit cards, and some dealerships of traditional brands offer a cash bonus for referring a customer.
Tesla, whose referral program began 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 gets an immediate $1,000 discount on the vehicle, excluding the Cybertruck pickup truck, the automaker said.
The $500 gift card for Tesla referrals can be used to purchase products from the Tesla store, toward a future vehicle purchase, software updates, free charging and vehicle maintenance, the automaker said.
“For most consumers, these programs may be the ones that nudge them over the edge into purchasing a product they’ve already been debating, effectively causing a nudge effect for those on the fence,” Drury said. “But it remains debatable whether these programs would actually convert the undecided, especially in the EV space.”
While 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 a 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 ranging from 6,000 to 10,000 per referral, based on the vehicle’s trim. The points are good for Lucid products ranging 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 accumulate 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 audience automakers are targeting with their products.”