Tesla Reverses Course on Store Closings, Will Raise Vehicle Prices Instead
Forget about test drives or buying a car in person. Tesla won’t accept any orders that way in the coming months.
New return policy means you can buy a car and then give it back after a week.
More than half of U.S. states still do not allow Tesla to sell direct.
UPDATE 3/11/19: Just a few weeks after it originally announced it would be closing almost all of its physical stories, Tesla has reversed course somewhat on this decision, saying now that it will raise prices on its vehicles and keep more stores open than originally planned. The company says that about half of the stories it originally planned to close will remain open, and an additional 20 percent of stores that had been flagged for closure are under review. Because of this, Tesla will raise prices on all models except for the base $36,200 Model 3 by around 3 percent. The price increase goes into effect March 18, meaning current prices will still be valid for orders placed between now and then. The company's new online-only sales model remains in place.
After years of battling state legislatures and car dealership lobbies to sell its electric cars without franchisees, Tesla said it would close all but a "small number" of its existing company-owned stores to save money.
While announcing that Tesla is starting to build the $35,000 Model 3 sedan it promised nearly three years ago and will, in fact, honor the $35,000 base price (plus a $1200 destination charge), Elon Musk said on Thursday that Tesla will only sell cars online to "enable us to lower all vehicle prices by about 6 percent on average." That means that most Tesla dealerships-er, stores, as Tesla avoids the D word-will be shuttered in the next few months, as will their employees. An unknown number in "high-traffic locations" will stay open but will no longer sell cars, instead converting to the "galleries" Tesla has popularized in shopping malls and other places where it cannot-either due to space or legal limitations-physically take an order and deliver a car on the spot. The move will affect Tesla stores worldwide. Service centers won’t be affected, but Musk said he wants appointments to be "same-day, if not same-hour" service where Tesla technicians will visit customers for "most" needs.
Tesla maintains 102 stores across 23 states, including Washington, D.C., with the majority clustered in California and Florida, according to the most recent list published on its website. But 27 states still ban Tesla from selling cars directly without operating franchised dealerships, including every New England state except Massachusetts. The line blurs in states like Texas, which has 10 galleries. These can show Tesla cars but refer potential buyers to start and complete their purchase on Tesla's website. Tesla owners in those states either purchase their cars from Tesla stores in other states or order online. Both options, depending on the customer's distance from a legitimate Tesla store, allow for home delivery.
Musk said Tesla will no longer offer test drives once sales switch to the web. Instead, he's offering a seven-day/1000-mile return policy and claims anyone can buy a car in just one minute.
"Quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends, and then return it for free," he said on Tesla's website.
If that's what Musk is really after, perhaps he could make more money by offering Tesla rentals. But, hey, that's a legacy business, right?
These are the states where you cannot buy a Tesla: Alabama, Alaska, Arkansas, Connecticut, Delaware, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, Vermont, West Virginia, Wisconsin, Wyoming.
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