"Tesla" closes hundreds of stores and resorts to the online sale of their cars. Why?

NEW YORK (Reuters) – Tesla, the world's largest maker of electric vehicles, believes that the future of online car sales is the best option for the coming period, but the company has risked heavy losses in closing its stores, Their products are online.

Last week, Tesla announced that it would begin closing most of its stores in an effort to cut costs and help lower the price of the top-selling model 3 to less than $ 35,000.

People will buy their cars online or over the phone, not through hundreds of stores, said Tesla, adding that selling cars online would reduce the cost of selling the car by 6%.

Buyers can order any item online, but car sales have been slow to switch to online shopping only, in part because all major automakers have resorted to agents to sell their cars .

Road test

In an email to Tesla employees, CEO Elon Musk said 78 percent of last year's Model 3 orders had been placed online, not in the company's stores, noting that 82% of customers had purchased model 3 without running. Driving test experience.

"In 2019, people just wanted to buy things online, no test drive, but those who bought a model 3 last year were already Tesla fans," he said.

It is unclear whether Tesla will be able to sell cars to the general public without offering a traditional driving experience.

"Our studies show that consumers want to buy more cars online, but that does not mean they're ready to make a big online purchase," said Michele Crips, an analyst at Cox Automotive.

"People do not just want to test driving, they want to sit in the car and learn technology, who will show them that?"

Due to the announcement of the closure of some stores last week, Barclays lowered the target price of Tesla, although it has already reduced the weight of the shares in its portfolio, but has still reduced.

Competitive advantage

Barclays analyst Brian Johnson predicts that selling the A3 model at a lower price will reduce the company's margins. He does not think Tesla will benefit from a competitive advantage among automakers who still use dealerships to sell their cars.

Thanks to direct sales to consumers, Tesla can keep the retail price of each car, which is essential for the company, which needs all the money needed to make its vehicles.

Tesla currently has 378 stores and service centers around the world, and the company did not disclose how many of them were in the United States or how many would close.

Musk said improving the service would be a top priority for the company this year, although he suggested shutting down the stores so he could allocate more resources to better service.