Tesla is closing most of its stores and adopting online-only model

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-only (or mostly) sales model.

“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 carmaker said in a statement.

Read more: I put Tesla’s high-performance Model S and Model 3 up against the BMW M5 and M3 to see how they compared — here’s the verdict

“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.”

Potential opposition from franchise car dealers

Elon Musk at the unveiling of Tesla’s new Roadster.
Tesla

It’s not clear how Tesla will achieve this e-tailing objective in the face of the resistance it has traditionally received 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 purchase by connecting with a dealership.

On a conference call with the media after the announcement, Musk said that the new plan would enable Tesla to sell cars more effectively and that the carmaker would be ramping up its service side. But in response to a question from Business Insider, he acknowledged that Tesla expects pushback from established auto dealers.

“This is 2019,” he said. “People want to buy things online.”

But he added that franchise-dealer opposition would be a violation of interstate commerce, and that is unconstitutional.

“Good luck with that,” Musk said.

To achieve the shift to online-only sales, 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.”

Source

more recommended stories

  • Why Mueller report doesn’t signify end of Russia probe

    On Friday, the special counsel Robert.

  • Trump supporters celebrate end of Robert Mueller’s Russia investigation

    President Donald Trump’s supporters celebrated the.

  • Mueller report: what happens next

    The special counsel Robert Mueller on.

  • Robert Mueller has turned in his full report on the Russia investigation

    The special counsel Robert Mueller has.

  • Photos: California’s super bloom of flowers can be seen from space

    The hot, dry hillsides of Southern.

  • Tijuana residents stealing concertina barbed wire on border for homes

    Voluminous bundles of concertina wire strung.

  • The Cinderella team that rocked March Madness the year you were born

    The 2010 NCAA tournament was defined.

  • Dog dies in cargo hold of Air France flight

    A dog died on an Air.

  • State’s Pompeo jokes Trump may fire him via tweet as rumors swirl

    Secretary of State Mike Pompeo made.

  • WHERE ARE THEY NOW: The cast of 'Pretty Little Liars'

    Lucy Hale, Ashley Benson, Shay Mitchell,.

  • Ethiopian Airlines and Lion Air crashes similarities

    Boeing has come under scrutiny after.

  • New Zealand attorney general backtracks on semi-automatic weapons ban

    David Parker, the attorney general of.

  • New Zealand terror attacks: 50 dead, suspect identified as Brenton Tarrant

    The death toll for the deadly.

  • Watch Ryan Moore score a hole-in-one at the par 3 17th at Sawgrass

    Ryan Moore just nailed one of.

  • I tried Every Man Jack’s activated charcoal skin-care line — here’s what it’s like

    Insider Picks writes about products and.

  • Where to buy the new Adidas Ultra Boost 19

    Insider Picks writes about products and.

  • A photographer captured the last ten years his parents spent together, and the heartbreaking photos provide an intimate look at enduring love and loss

    Fine Arts photographer Paddy Summerfield’s series.

  • Cristiano Ronaldo brought Juventus back from the dead, beating Atletico 3-0

    Before a ball had even been.

  • Alexandria Ocasio-Cortez more famous than top Republicans, Trump cabinet

    New York Rep. Alexandria Ocasio-Cortez is.

  • Here are the finance executives charged in the college-admissions cheating scandal

    Manuel A. Henriquez is the cofounder,.

  • FDA to finish rules on e-cigarettes sales before Gottlieb resigns

    The US Food and Drug Administration.

  • The most stunning photos from this week’s news

    This week’s news included stunning shots.

  • Video suggests protesters set aid truck on fire at Venezuela border

    Last month, an US-backed effort to.

  • Kevin Durant, Kyrie Irving free agency rumors are mounting

    Some believe that Durant may only.

  • Americans will need a visa to visit 22 European countries by 2021

    Travel to Europe won’t be so.

  • Air freight, a key measure of trade, sees biggest drop since 2015

    Air freight has been weakening since.

  • Elizabeth Warren call to break up Amazon, Google is a real threat

    It’s been a long time since.

  • Trump’s rhetoric casts doubt on how he responds to natural disasters

    President Donald Trump and the first.

  • The internet reacts to Mark Zuckerberg’s new privacy-focused Facebook

    On Tuesday, Mark Zuckerberg published a.

  • Steam blocks ‘Rape Day’ game release due to ‘unknown costs and risks’

    Steam, the most popular platform for.

  • American Eagle exec says brand primed to capitalize on store closings

    Teen-focused brand American Eagle, which also.

  • Self-driving cars worse at detecting people with dark skin, study says

    A new study from the Georgia.