Last week, Tesla surprised damn near everyone by announcing it will close most of its retail stores and switch to an all-online ordering system. While Tesla buyers have typically been ordering cars online for years now, the move represents an end to the physical locations where they could test-drive cars, get educated on the various models and options and buy merchandise.
But in true Tesla fashion, this came with very little warning to employees and was largely part of a triumphant declaration that the company had finally hit the long-awaited $35,000 Model 3 sale price. Closing retail stores—and laying off its staff—was presented as an unfortunate necessity in order to offer customers such an amazing car at such a low, low price.
How abrupt was this shift? We’re still trying to figure that out, but the short answer is pretty damn quick. As Bloomberg pointed out, Tesla was boasting about its retail network in regulatory filings as recently at February 19. Meanwhile, employees of those stores found out about the general closures along with the rest of us.
Here’s the exact announcement from the company:
Last year, 78% of all Model 3 orders were placed online, rather than in a store, and 82% of customers bought their Model 3 without ever having taken a test drive. Customers can now buy a Tesla in North America via their 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 without a test drive. You can now return a car within 7 days or 1,000 miles for a full refund. Customers are becoming increasingly comfortable making purchases online, and that is especially true for Tesla — which is a testament to the products we make.
As a result, over the next few months, we will be winding down many of our stores and significantly reducing our spend on sales and marketing, which will help make the price changes we’ve announced today possible. Shifting all sales online combined with other ongoing cost efficiency will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point.
Tesla said it will keep several galleries in “high-traffic locations.”
In the past we’ve covered what a rough environment these stores can be for employees. In light of the latest news, we’d love to know more about what it’s like working for Tesla retail stores right now. Do you still have a job? Do you know for how much longer? What have you been told? What haven’t you been told?
Also, if you recently worked at Tesla retail store and have some insight into how closing the stores may impact the company as a whole, we’d love to hear from you, too.
We have a handy guide on how to contact us as securely and as anonymously as possible, though you are always also welcome to email me at agordon at jalopnik dot com.