Tesla Inc. on Thursday announced it is shuttering most network of stores and shifting worldwide to a web-only sales model. Over the next few months, Tesla will close most of the stores, where consumers can look at, touch and order cars.
The surprise announcement coincided with the company’s release of its long-awaited $35,000 version of its Model 3 that has a range of 220 miles. It also plans to sell an upgraded version called Model 3 Standard Range Plus, which offers 240 miles of range, for $37,000 before incentives.
Tesla declines to share the exact number of stores it operates. However, it had a combined 378 stores and service locations as of the end of the fourth quarter. In a few high-traffic locations, Tesla will convert stores into galleries, showcases and Tesla information centers, the company says, without providing specific numbers.
The move to an online-only sales model, which will eliminate an unspecified number of jobs, is aimed at cutting costs to enable the automaker to sell cars at lower prices, the company says. “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,” a company statement says.
To facilitate its online-only model, Tesla plans to upgrade its ecommerce capabilities outside North America. “You can now buy a Tesla in North America via your phone in about one minute, and that capability will soon be extended worldwide,” the statement says.
Tesla also plans to beef up its service system, with the goal of offering same-day—and perhaps same-hour—service, most service done at the customer’s location, rather than at a service center. Also, Tesla says customers can now return a car within seven days or 1,000 miles for a full refund.
In an email to employees, CEO Elon Musk didn’t say how many jobs Tesla plans to cut. Some workers will move to other areas of the business, and he expects headcount will increase next year, Musk wrote.
“We will be significantly increasing headcount in service technicians,” Musk said during a Thursday conference call.
Tesla announced a previous round of job cuts in 2019. In an email to employees in January, Musk he had “no choice” but to reduce full-time employee headcount by about 7% and retain only the most critical temps and contractors.Favorite