Memo Elon Musk on model 3 cheaper, closing stores



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Tesla CEO Elon Musk sent an email to employees on Thursday to explain the company's decision to downsize its sales and marketing divisions, according to a copy of the memo sent to CNBC.

Tesla announced that Model 3 sales, worth $ 35,000, would finally be available, adding that all Tesla vehicle sales would move exclusively online. As part of the announcement, Musk also warned that the company would release no profit in the first quarter, dropping Tesla's share price by more than 3% on Thursday night.

Last month, I noted in my email that the fundamental problem that Tesla has to overcome is that our products remain too expensive for most people. We know that many people want to buy model 3, but just can not afford to buy it.

That's why we're pleased to announce today that we now offer Standard Model 3 for $ 35,000. This is an important milestone for Tesla, the result of many years of hard work by employees across the company and of which you should all be very proud. You can read the details of the ad on our blog: LINK HERE

In addition, we make the decision to transfer all sales worldwide only online.

Last year, 78% of all model 3 orders were placed online rather than in a store and 82% of customers had purchased their model 3 without having ever done a test. Customers can now purchase a Tesla in North America via their phone in about 1 minute, and this capacity will soon be expanded around the world. We also make it much easier to test and return a Tesla without testing. You can now return a car within 7 days or 1000 km for a full refund. Customers are becoming more comfortable with online shopping, and this is especially true for Tesla, a testament to the products we manufacture.

As a result, over the next few months, we will close many of our stores and significantly reduce our sales and marketing expenses, which will help make the price changes announced today possible. Combining all online sales with another current profitability will allow us to lower prices for all vehicles by an average of about 6%, which will allow us to reach the price of $ 35,000. of the model 3.

A small number of stores in busy locations will remain Tesla galleries, showcases and information centers. At the same time, we will increase our investment in Tesla's service system and manufacturing, and I expect this number to increase next year.

Unfortunately, this means that some jobs will be affected or transferred to other areas of the business. It's a hard decision to make, but it's necessary to make our cars more affordable. Our sales team has fought on the front lines to advance our mission and has always been our link with hundreds of thousands of customers. I want to express my sincere gratitude for all that you have done.

Over the next few weeks, we will be evaluating our entire sales and marketing organization to understand where effective operations are and how best to support the transition to online sales while continuing to provide a really impressive Tesla shopping experience and educational.

We will soon share more information on this transition.

Thank you,
Elon

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