Tesla to Close Retail Showrooms to Cut Costs
SAN JOSE (KPIX) -- Tesla has announced it's now ready to deliver on its promise to make a $35,000 electric car, but it may be laying off sales staff and closing brick and mortar sales showrooms to make it happen.
The company says it will soon be moving to online only sales for its cars.
At the Santana Row Tesla store in San Jose, there were plenty of interested buyers in the showroom Friday. The first thing most of them do is talk to a sales rep and slip into the seats.
Under Tesla's plans, customers wouldn't be able to do that anymore.
"If you're spending that much on a car, I have to make sure that if I go on a big shopping trip are all my groceries going to fit?," said Vanessa Smith, who came from Monterey.
Ryan Willis says he likes the idea.
"It seems like a really good deal. It cuts out the middle man. You don't have to worry about commissions for salesmen and
stuff like that," Willis said.
In a blog post, Tesla said that the $35,000 Model 3 is now available. But the company said it has to cut costs to make it happen.
"Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6 percent on average, allowing us to achieve the $35,000 Model 3 price point," the blog post said.
One current Tesla owner says he supports the company's plan.
"I think it's good if that's what it takes to deliver the $35,000 car as they promised and they are doing it sooner rather than later," said Mohan Paul, who owns a Tesla Model S.
The cost cutting could include layoffs to the sales staff and closing physical stores and service centers.
Tesla said it could be hiring more mobile service technicians who will be doing more work at customer's homes or businesses.
Willis said the moves are putting a Tesla into his price range.
"If it gets more cars into more people's garages, that's pretty cool," said Willis.
As for the all important test-drive, Tesla said it will be making it easier for buyers to return a Tesla if they are not happy. Tesla says customer could a car,drive it for a week or less than a thousand miles and return it for a full refund.
Tesla also said it could be opening galleries and information centers as it closes physical sales locations. Tesla has not identified any stores which would close under its new sales model.
