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Tesla's unique approach to sales is giving it headaches

Dan DeFrancesco   

Tesla's unique approach to sales is giving it headaches
  • This post originally appeared in the Insider Today newsletter.

Happy Friday! As someone who often sports Crocs, I shouldn't be offering fashion advice. But I don't get the hype around these fishnet flats being the shoe of the summer.

In today's big story, Tesla insiders detail how it needs to rethink its sales strategy amid a shift in the EV market.

What's on deck:

But first, what can I do to get you in this car today?


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The big story

For sale

One of Tesla's biggest assets is its willingness to try new things, but its unique approach to sales is also what's giving it headaches.

It's been a tumultuous year for the EV maker and its CEO Elon Musk. Tesla's delivery numbers dropped for two consecutive quarters, and its market share dipped below 50% for the first time in company history.

A key issue is Tesla's inability to evolve its sales tactics as the EV market rapidly changes. Business Insider's Grace Kay spoke to more than a dozen current and former employees in Tesla's sales division about how the company has tried to kick-start its sales unit.

Not unlike its cars, Tesla's sales approach is innovative compared to the rest of the automotive industry. It doesn't rely on third-party dealerships and keeps most of its inventory off-site. There's also no haggling on price, and online sales make up a good chunk of the business.

It's a great strategy when the cars sell themselves — which Teslas did for a while — since you don't need to maintain a traditional sales structure. But Tesla's approach has fallen flat among mainstream car buyers, leaving it scrambling for a fix.

Tesla's sales conundrum represents a common mistake tech companies make: pushing for innovation in unwanted places.

The tech industry loves to find inefficiencies in businesses to streamline them, and we love them for that. After all, the result can often be great for customers.

We have on-demand music, movies, and television at our fingertips. You can place a food delivery order in seconds from your couch, and the love of your life might be a few swipes away. What a time to be alive.

But for certain things, people don't mind a more old-school approach.

Fintechs learned this the hard way when they offered chatbots instead of humans. As much as younger people might hate talking on the phone, they don't mind it when their money is on the line.

Shopping is another example. Retailers would love to have you make quick, impulsive purchases from your phone. But when it comes to big-ticket items, customers often pivot to their laptops, much to the chagrin of retailers, for what they call "big-screen purchase."

This gets us back to Tesla. Sure, if your customer base is full of Musk acolytes, you can rely on low-pressure salespeople. But once that well runs dry, you're going to need someone to pitch apprehensive shoppers.


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What's happening today

  • US Department of Labor releases an employment report, including data on the unemployment rate.
  • Chevron, ExxonMobil, and other companies report earnings.
  • It's International Beer Day. Grab a pint!

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Annie Smith, associate producer, in London. Amanda Yen, fellow, in New York.



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