Tesla Will Close Its Retail Stores, Switching To Online Sales

In its Thursday announcement, Tesla said that it will stop selling its vehicles offline through retail stores and switch to an online sales platform. Elon Musk, during a conference call with reporters, said that this change will help the company save costs and launch the $35,000 worth Model 3 car to consumers.

Tesla Model 3 $35,000 version

According to estimation by Tesla representatives, changing to online sales 100 percent will lead to a cost reduction of up to six percent, which the company will pass down to its customers. Besides the announcement of the more affordable Tesla Model 3, the company also said it will lower the costs of the Model S and Model X too.

Usually, the elimination of one business facet of a company means it has to lay off a number of employees relating to the elimination. However, Elon Musk made a firm statement that the company has plans to significantly expand its service network headcount so that it can enhance customer experience when using Tesla’s services. Musk additionally said that the company’s service staff is reporting directly to him.

Tesla's retail store

Although Tesla doesn’t reveal how many of its storefront locations will be kept open so people can come to see and touch the automobiles with their own hands and eyes, it has already overhauled the deposit program to decrease the need of these places.

Currently, Tesla lets consumers place a $1,000 deposit on its cars and they can drive it for a maximum of 1,000 miles (about 1,650 kilometers) and can still return the car in case they are dissatisfied. Moreover, the company is also pushing its deposit refund process so it can make the change feel more smooth and natural for customers.

Tesla has been making electric cars for a long time now with the Model 3 one of its important products. The car went in mass production dated back July 2017.