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 discounts on vehicles.
Rivian's program, announced in August, offers a $750 credit to both the Rivian owner who provides the referral code and the vehicle buyer who uses the referral code. Both also get six months of free charging at Rivian Adventure Network sites, primarily near recreation areas on the East and West Coasts.
Rivian said the program is currently only available to U.S. owners, but will expand to Canada next year.
These “two-sided” rewards programs offer a low-cost alternative to traditional automakers’ big-budget advertising campaigns, analysts say. The programs target friends and family members of Rivian owners who are more likely to share their interest in electric vehicles than the general public.
“These programs are attractive to automakers because they are relatively easy to implement and therefore less expensive to operate than other advertising methods,” said Ivan Drury, an analyst at Edmunds. “Creating a program where both parties benefit also creates a win-win situation that is likely to encourage more participation.”
The automaker said the $750 in Rivian rewards can be used to purchase items from its online store, including apparel and car accessories, or toward the purchase of a vehicle. For a buyer of a new Rivian vehicle, the rewards are issued after the purchase and are not applied to that purchase.
“Rivian offers points that can be redeemed for Rivian gear because it is a lifestyle product, and that has the dual benefit of many branded items serving as additional advertising, and the perceived value of branded gear is likely higher than its actual cost,” Drury said.
The electric car maker is also offering an “adventure weekend” for the first 100 owners who bring in 25 referrals, the release said.
Rivian began production three years ago and is still far from a household name. The startup expects to sell about 57,000 vehicles this year, about the same as last year. Rivian primarily relies on 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 traditional brand dealers offer a cash bonus for referring a customer.
Tesla, whose referral program began a decade ago, updated it last month to offer owners a $500 gift card if someone uses their referral code to buy a car. 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 toward Tesla store merchandise, future vehicle purchases, software updates, free charging and vehicle servicing, the automaker said.
“For most consumers, these programs may be the ones that nudge them toward purchasing a product they’re already considering, effectively creating a push-pull effect for those who are undecided,” Drury said. “But it’s debatable whether these programs will actually sway the undecided, particularly in the electric vehicle 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 loses billions of dollars a year, launched its first referral program in August 2023. It offers up to $1,250 off a vehicle 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 earns points ranging from 6,000 to 10,000 per referral, depending on the vehicle's trim level. The points are good for Lucid products, which range from 800 points for a hoodie to 8,900 points for a home charger, Lucid said. Lucid is also offering an exclusive tour of its Arizona factory for owners who have accumulated 50,000 points, the company said.
“Referral programs, if done effectively, should help automakers turn existing customers from advocates into advertisers,” Drury said. “And since birds of a feather flock together, that audience should be similar to the target demographic automakers are seeking for their product.”