Closing Tesla Stores and Online Sales – Part Three, Robyn Denholm Weighs Heavy

March 28, 2019 by Steve Hanley

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Elon Musk really put the fox among the hens at the end of February when he suddenly announced that Tesla would close a significant number of his stores and that, henceforth, everyone would order his cars online. Not surprisingly, Tesla employees currently working in these stores were somewhat surprised to learn that they could soon lose their jobs. Many other people wondered if a 100% online sales model was a realistic plan.

Elon says that he likes making quick decisions on the theory that if they turn out to be wrong, they can be easily reversed. This model has worked quite well for him so far, if one uses the standard measure of a person's value, which in today's world involves calculating the size of his bank account.

Other styles of management exist though. Some even advocate a moment of reflection before making major political changes. This is the kind of thing they teach at School B and it's an approach that is no longer fashionable in the world of technology, where running, breaking things is considered the best way to to follow.

On March 10, Tesla published a blog clarifying the February announcement. She stated that she reviewed the store closure policy and decided that some revisions to the plan were necessary.

"[W]We decided to keep significantly more stores than those previously announced, as we continue to evaluate them for several months. At the recent closure of 10% of outlets, we selected stores that did not invite the natural traffic for which our stores were always designed. These are stores that we would have closed anyway, even though in-store sales were our entire sales model. Some stores located in highly visible areas that were closed due to their low flow will be reopened, but with a smaller Tesla crew. In addition, 20% of sites are under review and, depending on their effectiveness in the coming months, some will be closed and some will remain open.

"Due to the opening of a much larger number of stores, Tesla will have to raise vehicle prices by about 3% on average worldwide. In other words, we will close only about half of the stores, but the savings will be only about half. "

The blog also addressed concerns about driving tests and online orders.

"To be clear, all sales around the world will still be made online, as potential Tesla owners entering stores will simply see how to order a Tesla over the phone in minutes. And the generous 1000-mile or 7-day return policy, whichever comes first, should avoid most attempts. However, cars will still be available for driving tests at the stores at the request of the potential owner of Tesla. The stores will also have a small number of cars in inventory for customers who wish to leave immediately with a Tesla. "

Apparently, this was not clear enough for some people, so on March 27, Elon e-mailed all Tesla employees to clarify things. according to CNBC the e-mail said:

"Stores with a high traffic rate and high sales will not be closed at all. It would make no sense to do so, except in rare cases where rent is ridiculously high. In addition, Tesla will continue to open stores around the world that meet the above criteria. "

In terms of online sales, Musk has clarified its previous clarifications. "What we mean by" all sales will be online "is that the purchase of a Tesla will always be via the phone or computer of the new potential owner. This is true that they are at home or in a store. Unlike other automakers' purchases, ordering a Tesla does not require * physical paperwork *.

"It's very different from the usual expectations of other manufacturers in terms of purchase. It is simply intended to emphasize that ordering a Tesla is very easy and can be done in 2 minutes from your phone or laptop on Tesla.com. Ordering a Tesla is not much more difficult than ordering an Uber, but nobody knows it!

Robyn Denholm weighs in

With all the support and fillings from Musk and Tesla, coupled with the latest Elon tweets from the SEC, Robyn Denholm, the new President of Tesla, said: Bloomberg in Australia this week: "I do not think it's a problem. The company works very well and the council itself is very committed. We meet him all the time. "

In the run-up to the April 4 meeting with a federal judge regarding the use of Twitter by Musk, Denholm said, "Today, Twitter is part of the day-to-day business of many leaders. From my point of view, he uses it wisely. Let's hope the judge feels the same.

Keywords: Elon Musk, online sales, Tesla, Tesla stores