Tesla enters uncharted territory after move to dismantle store network

Daniel Fowler
March 5, 2019

Mr Musk said that shifting sales online could cut costs by 5% to 6% and that Tesla would use those savings to reduce prices of its two other automobiles, the Model S sedan and Model X sport-utility vehicle.

That's helping Mr Musk deliver the $35,000 version of the Model 3 for the first time, nearly three years after the company started taking orders for the auto.

While plans to streamline the sales process in the United States "makes a lot of sense", Vinkhuyzen told DW, "In most of Europe, the Tesla brand is not known well enough to sell only by word of mouth".

Besides the Model 3, Tesla is developing a new Model Y SUV for 2020 production, while beginning to build a factory in Shanghai.

Tesla has been pushing to cut the cost of the Model 3, trying to get the starting price for the compact vehicle down from the level of $49,000 when it debuted in 2017.

It offers 355km of range, a top speed of 210km/h and a 0-60mph (97km/h) time of 5.6 seconds, while the Standard Range Plus will do a claimed 386km on charge, hit 60mph in 5.3 seconds and tops out at 225km/h. He said consumers in large cities like Munich or Frankfurt find Tesla's existing stores convenient.

Chief Executive Elon Musk's warning on profit during a conference call with members of the media, which did not include Reuters, contrasted with Tesla's statements last month that it was expecting a "very small" net profit in the first quarter.

Tesla also announced that it is now moving to an entirely online sales model and will be shuttering most of its retail locations in the US.

Tesla Model STesla's Model S order page as of March 1, 2019.

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It's finally here! That tempting $35,000 entry point to the Tesla Model 3 range which has been talked about for years has finally gone on sale.

Tesla said its sales change is essential to meet its price goal. "There's no way around it", Musk said.

"Cutting prices is more often a sign of weakness unless you are Amazon", he said. Shares in Tesla closed 7.8 percent lower to $294.79 on Friday.

Mr Musk reiterated that improving service in 2019 is Tesla's top priority and said the company will be adding jobs worldwide to address what's become one of the biggest concerns of new customers. Mr Musk said Tesla is increasing the number of people working on servicing cars as part of efforts to improve customer experience. This substantially opens up our ability to buy cars.

"You can now return a vehicle within seven days or 1,000 miles for a full refund", it says in a statement.

To further reduce costs, the automaker said on Thursday it was moving all vehicle sales online, and shutting down its physical stores, except those located in high-traffic locations. Of those customers, 82% never even took the vehicle for a test drive in a showroom.

In terms of in-car tech, the Tesla Model comes with a 15-inch center touchscreen display that provides you with controls for climate, seats and more, as well as all your infotainment. But Mr Musk's goal for Tesla has always been to produce a mainstream electric vehicle for the masses.

In a bid to replace traditional test drives, Tesla is now offering customers a penalty-free refund within a week or a 1000 miles of delivery.

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