In what comes as a major shift to the company, Tesla announced that it will close most of its physical locations over the “next few months” and only sell its vehicles online. It also announced that its will lay off some of its retail employees. The announcement comes at the same time that it said it will finally start to sell its long-promised $35,000 Model 3.
The customers who buy their Teslas online will have a maximum of one week to return the car if they are not satisfied with the product. In a call with some reporters Thursday, Elon Musk, the founder and chief executive officer of Tesla, said that he was confident that the customers would welcome this option. The move to e-commerce will help in cutting some of the operating expenses of Tesla, as well as avoid dealing with local politics that have stopped it from operating its own stores in some states including New Mexico, Connecticut, and others.
Tesla, however, said that it will keep some of its retail locations open, which the firm described as “a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centres.” It added that there will also be “some headcount reduction” as an outcome of the shift.
Musk did not disclose the number of employees that will lose their jobs, nor whether the layoffs were linked to the “company-wide restructuring” that was revealed in June 2018.
He stated: “It is a hard decision but I think it’s the right decision for the future.”
Musk added that Tesla will “significantly” increase the number of service centres in order to meet the demand of its expanding customer base. The firm offers mobile service, in which Tesla-branded repair vans can be summoned through the mobile app of Tesla. Musk said that the service team of the company would now report to him directly, with the goal of providing same-day service to all the owners of Tesla.