Tesla is eliminating most of its stores and going to an online-only sales model
- On Thursday, Tesla announced that it would eliminate most of its stores and move to an online-only ordering model.
- Tesla is also doing away with the traditional pre-purchase test drive.
- It's unclear whether this plan will work in the US, given the prevalence of franchised auto dealers who have traditionally opposed direct sales.
There was a lot of speculation about what Tesla CEO Elon Musk would announce this week after he tweeted that some big news was coming.
But nobody expected Tesla to kill off its physical retail locations.
The top news was the arrival of the long-awaited $35,000 Model 3, the true mass-market vehicle that Tesla promised in 2016 but hasn't been able to deliver until now.
Arguably, the bigger news was that Tesla is going to an online-online (or mostly) sales model.
"You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide," the carmaker said in a statement.
"Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected. Over the next few months, we will be winding down many of our stores, with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centers. The important thing for customers in the United States to understand is that, with online sales, anyone in any state can quickly and easily buy a Tesla."
It's not clear how Tesla will achieve this e-tailing objective in the face of the resistance it has traditionally faced from franchised auto dealers in various US states. It is possible to configure and price a vehicle via a manufacturer's website, but a customer must complete the deal by connecting with a dealership.
Tesla will also streamline the buying experience.
"We are also making it much easier to try out and return a Tesla, so that a test drive prior to purchase isn't needed," the company said.
"You can now return a car within 7 days or 1,000 miles for a full refund. Quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free. With the highest consumer satisfaction score of any car on the road, we are confident you will want to keep your Model 3."