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Tesla Will Close Most of Its Stores, Only Sell Cars Online

Posted by BeauHD on from the financially-stable dept.

Tesla CEO Elon Musk said in a call with reporters Thursday that the company will only sell its vehicles online. As a result, the electric carmaker will close most of its stores over the "next few months." The Verge reports: Tesla will keep some of its retail locations open, which the company described as "a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centers." The decision to shift away from brick-and-mortar retail is necessary if the company is to remain financially sustainable, Tesla said. The company's finances have stabilized somewhat in recent months, but Tesla still operates on very tight margins. Tesla said in a blog post: "You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide. 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. 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."

The company announced the move at the same time it said it will finally begin to sell its long-promised $35,000 Model 3.

19 of 96 comments (clear)

  1. Could this be the fastest dup on the road? by squiggleslash · · Score: 5, Insightful

    It's literally the same as the previous post, but minus most of the information... and both were published by the same editor. What gives?

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    1. Re:Could this be the fastest dup on the road? by DontBeAMoran · · Score: 3, Funny

      I know! It's quite shocking, really...

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  2. Re:I'd Love For Tesla To Actually Honor Nikola Tes by Brannon · · Score: 5, Informative

    Ummmm.

  3. Well then by quonset · · Score: 2, Interesting

    No need to consider a Tesla. If I can't feel how it drives, how the seat feels, feedback from steering, wind and road noise, and everything else which can make or break such a purchase, I'll cross this off my list.

    For those that don't mind this, more power, but some of us like to know what we're getting before we put down cash.

    1. Re:Well then by drinkypoo · · Score: 5, Insightful

      You can still get a test drive. But also, Tesla doesn't need you. They've got thousands of people lined up to buy these cars. They're probably counting on word of mouth to keep things going for the foreseeable future, and from what I can tell, it's a viable plan.

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    2. Re:Well then by drinkypoo · · Score: 3, Insightful

      If they have thousands of people lined up to buy their cars - then why can I order Model S and Model X in 2 weeks or so?

      If they didn't, you could have one tomorrow.

      Porsche will take away the buyers from the Model S and X.

      Could very well be, but we'll see how it fares in the real world. I think the S will still do OK, but perhaps not the X.

      Tesla is probably losing money on the lower end Model 3 (but may have positive cash flow).

      Third party analysis says they should be making money on each unit.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  4. Mistake by TWX · · Score: 4, Interesting

    This is a mistake. A car is not like most other purchases, and while Teslas aren't cheap, Tesla isn't so far removed from traditional mass-market sales as to be able to take a page from luxury-performance makes like Ferrari and sell cars to buyers that haven't driven the particular model in question yet.

    Sure, there are some people that would be willing to buy a car untested, but I don't think that's most buyers, and I don't care how good Tesla's return policy is, it's a huge hassle to buy something incredibly expensive and to then return it, especially when financing is involved. It's not zero-risk.

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    1. Re: Mistake by c6gunner · · Score: 2, Insightful

      Something like 500,000 people were willing to put a down payment on a Model 3 when Tesla started taking orders, years before the car was even in production. I don't think test drives are going to be a big issue here.

      Anyway Tesla has stated that you can return the car within the first 7 days for a complete refund, so if you really want a test drive just go ahead and buy one. 7 days is a much longer test drive than you'll get from any other manufacturer.

    2. Re:Mistake by Darinbob · · Score: 5, Interesting

      For "most other purchases" I also need to see the item before I will buy it. The internet is a terrible way to sell things to be honest. I want to know if clothes will fit, I want to compare items nearby, see how heavy they are, and so forth. My friends who say they shop online also say they send back a lot of the stuff they get if it turns out to not fit or otherwise not what they wanted, but that seems amazingly wasteful.

    3. Re: Mistake by Anonymous Coward · · Score: 3, Insightful

      "Anyway Tesla has stated that you can return the car within the first 7 days for a complete refund"

      People haven't even been able to get their deposits back, you think Tesla is going to give their $50k back? Tesla is broke, especially after the $billion payment due tomorrow.

      And how does that work with the loan these buyers have to take out? Can't just cancel that for a refund, the bank will want interest on a buyout. That's a several thousand dollar test drive.

    4. Re: Mistake by MadKeithV · · Score: 2

      Just look at all the special characters you wasted in that post!

    5. Re:Mistake by olddoc · · Score: 2

      I agree completely with you that the internet is a terrible way to buy/sell most things. It's good for repeat purchases of known items like furnace filters or 16GB SD cards. It is not good for buying a car or clothing.

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    6. Re: Mistake by edtice1559 · · Score: 2

      How did this get modded up? Loans on cars are simple interest loans. There is no penalty for early payment. You can take out a loan today and pay it of tomorrow. Not that it really matters if you are credit worthy. Most dealers will "spot deliver" meaning they give you the car without payment because the loans take time to process and they don't want you to change your mind. Sales tax is certainly refundable is you return the purchase. Some fees that you pay to the state for title and registration may not be. But Tesla could certainly offer to absorb those. But again they probably aren't doing that at all. They are probably going to give you the car for a seven-day "test drive" where it's still "their car" with their license plate an insurance. So there isn't even a purchase to cancel. If you are non credit worthy, they may ask you to place a deposit equal to the cost of the car but for the overwhelming majority of people who can buy a $35k vehicle, all they really want is for you to leave the dealership with the car by any means possible.

  5. Re: Musk is a con by Anonymous Coward · · Score: 5, Funny

    He really is. He started PayPal and that was a total flop! Good luck finding anyone who's ever heard of it anymore. SpaceX never did anything worthy of note, except blow up rockets before they went out of business. Now you have this failure of a company which has no mass market vehicles and doesn't have the highest market cap of any American car company. Besides, he makes all of his cars over seas, not in America, so I'm excited to see it fail. It's like everything he touches fails. What a con!

  6. Next step... by LordHighExecutioner · · Score: 3, Funny

    ....to further reduce costs, Telsa will sell cars only in kit, to be assemled by the user.

  7. Did you read the summary? by CaffeinatedBacon · · Score: 2

    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. 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."

  8. Re:How do I test drive it? by DrXym · · Score: 2

    You don't. You buy it sight unseen and hope you like it enough to not want a refund. I guess Tesla are hoping that good word of mouth and customer satisfaction ensures that gamble pays off.

  9. Much easier to test drive than to buy and return by olddoc · · Score: 2

    I agree with all the posts that this is a mistake. There are so many questions you have with such a major purchase and they can only be answered with a test drive. Do the seats hurt my hips? Can I see out of the rear corner? How easy is it to load and unload the trunk? Also, Tesla tightly controls the repair market and things still go wrong on electric cars and they still need service centers. I feel they actually need to add more locations with all they cars they have out on the road. Yes the cars don't need oil changes, but you can still hit a pothole and bend a wheel and damage a control arm. Your A/C fan motor can start to make noises. The window channel can become damaged and your window won't go down and up. There are 300,000 people in the metropolitan area I live in and the nearest Tesla location for service is 1 hour away. They need to add locations, not subtract and they need to hire and train more people for service work.

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    Power tends to corrupt, and absolute power corrupts absolutely.
  10. Re:Much easier to test drive than to buy and retur by cellocgw · · Score: 2

    There are 300,000 people in the metropolitan area I live in and the nearest Tesla location for service is 1 hour away. They need to add locations, not subtract and they need to hire and train more people for service work.
     

    This news is not about service centers (although you can view and test drive there). It's solely about the standalone showrooms such as the ones in major malls (in the USA).
    Tesla has said it's planning to open lots more service centers, BTW. Progress there is slow; but they are definitely not closing any service center.

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