Tesla Owners on Dealerships Closing: It's “Honestly Kind of Scary”
Tesla is shifting all of its sales online, the company announced Thursday, in a dramatic move that’s received a mixed reaction from the fan community. The move is aimed at reducing costs so the company can build its more affordable vehicles like the newly-released $35,000 Model 3, but the sudden loss of a key aspect of the buying process has left some advocates shocked, with one user describing it as “honestly kind of scary.”
“Wow, this seems like the biggest news of the day to me,” a Reddit user called “thebigbobowski,” owner of an all-wheel-drive Model 3 and Tesla solar panels, wrote on the dedicated subreddit. “That’s a huge change.”
Tesla has built its brand around an Apple-like philosophy of thinking differently. It burst onto the scene in 2008 with the original Roadster, a high-performance supercar that showed the world an all-electric car could bring serious speed. Advocates in the years since have fought to persuade electric-curious friends that their fears of short range and low performance were unfounded.
On the TeslaMotorsClub forums, fans regularly recommended taking a Tesla for a test spin with zero commitment by visiting one of their stores — Tesla refuses to use independent dealerships so that it can better educate consumers about its unique cars, a decision that has met resistance from state legislatures. When Tesla insisted on giving priority to Model 3 reservations made in-store, InsideEVs speculated that the move could help newcomers develop a more personal face-to-face relationship with a representative.
This all changed on Thursday. The company plans to bring all of its worldwide sales online-only, globally expanding the system used in North America where users can buy a Tesla with their smartphone. Most of the stores will shut over the next few months, bar a few in high-traffic areas that will instead act as showcases for the cars. These moves are expected to save the firm around six percent on the price of a Tesla.
In lieu of a store offering test drives, consumers can now buy a car and return it within seven days or 1,000 miles for a full refund. Tesla wrote in its statement that”quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free.”
This explanation has seen a mixed response. Reddit user “noodlez05” wrote that “your average person isn’t going to jump through the hoops of buying a car sight unseen, even if they know there’s a 7 day return period.” TeslaMotorsClub user “paulp” stated that “Tesla would struggle in Australia without a place that people can sit in the car and take it for a drive.”
While users argued over whether the market is ready for such a shift, there was widespread agreement that the move is perhaps indicative of the future. Tesla is currently developing an autonomous driving system that could enable self-delivering cars, allowing the firm to simplify its operations further. In a world where Amazon Prime and supermarkets deliver groceries direct to consumers’ doors, perhaps ordering cars over the internet is the next logical step.
“It is going from the Apple model to the Amazon model,” wrote Tesla forums user carlk. “That’s a huge, and even more innovative, change but we still need to find out about details. They won’t need to worry about state resistence [sic] if it works out.”
Tesla and Apple have received many comparisons over the years, to the point where analyst Ross Gerber urged the latter to buy a stake in Elon Musk’s firm in 2018. Like Tesla, Apple had to convince skeptical buyers that the Mac was a viable alternative to their Windows PC. The stores, which first opened in 2001, laid the products out for visitors to try out for themselves, with a Genius Bar at the rear for product issues and theaters for holding presentations.
“Steve [Jobs] always cared about the customer,” former retail head Ron Johnson told Business Insider. “He designed products for himself that he would love, so he thought about the whole experience. He knew there was something a store could do that you couldn’t just do through software, so that’s why he wanted to build the stores.”
But while the iPhone has regularly topped the list of the world’s best-selling smartphone, Tesla is still securing its place in the market. The Model 3 was the top-selling sedan in the United States by revenue in the second half of 2018, but this followed a tough production process where the firm expanded from producing just over 2,000 cars per week in January to around 7,000 by the end of the year.
Tesla is bringing the Model 3 worldwide, with demand expected to reach around 800,000 annually. It’s also planning the Model Y, pickup truck, Semi electric truck, and second-generation Roadster. The company is surging into the future, and it shows no sign of slowing down — even if it means moving even further away from working as a conventional automaker.
With electric cars still only accounting for around five percent of global market share, there’s a lot of potential car buyers that will have to go elsewhere to try out an electric car.