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Just weeks after the announcement of its new online sales strategy only, Tesla is back on important elements of this strategy, leaving mainly a significant pay cut to its thousands of employees retail trade.
As previously reported, Tesla has launched the long-promised version of Model 3 at $ 35,000. President and CEO Elon Musk has announced his intention to make the price viable by transferring all online sales only, closing stores and downsizing.
Last week, Tesla slashed compensation for employees in the retail sector and began closing the first wave of stores.
We also reported Friday that Tesla froze its store closures and layoffs as part of the chaotic change in sales strategy.
In the middle of the night Sunday, the automaker announced major changes in the strategy shift, including leaving most stores open and partially increasing prices.
Most stores will remain open and Tesla will reopen even some closed stores last week. Tesla CEO Elon Musk initially said the automaker would keep only a "small" number of stores, but now retains about 90 percent of its outlets.
In an email sent to employees and obtained by Electrek, Musk said that only the stores located in "dark places" and uncrowded were closed:
"For the most part, the more than 10% of Tesla outlets we closed recently do not pass the Sherlock Holmes test. This means that most of these stores are located in places so difficult or obscure that only Sherlock Holmes can find them! Even if the sale in the stores was our only way of selling, we would have closed them anyway. "
As a result, Tesla would close these sites despite changing the online sales strategy only.
The automaker had previously announced that it was moving away from disk tests to focus on a simple return policy, but Musk now claims that test discs will be available again in stores.
Inventory vehicles will also be available. For custom orders, employees encourage customers to order via their phone online, which is quite similar to the way people were buying in-store before the online sales transition only.
At the end of the day, the role of retail employees remained virtually unchanged from what they did before the initial announcement, but their compensation was significantly reduced by eliminating sales and selling commissions. bonus.
We interviewed Tesla about the pay problem, but a spokesman for the automaker declined to comment.
Electrek's Take
I think most people would agree that reducing the transition is a good thing.
In my opinion, the biggest question is: Was it just a poor forecast or was it a way to significantly reduce the compensation of retail employees?
Some think it's just a chaotic – not well thought out – approach from Tesla:
While others believe that Tesla has planned this transition of "online only" sales to significantly reduce the compensation of retail employees:
Normally, I tend not to attribute to malice what can be explained by stupidity, but I must admit that there are some things that seem strange in this situation.
For example, Elon's presentation of driving test and online sales statistics based solely on Model 3 sales in the United States in 2018 is misleading. By 2018, Tesla had a limited park of test screens and 3 model test drives, as well as a large backlog of people having booked the model 3 .
This will inevitably distort data in favor of online sales without a disk test and it is not surprising that "78% of all Model 3 orders were placed online rather than in a store and 82% of customers bought their Model 3 without having ever had a disk test. , "As Elon said.
I have a hard time believing that Elon nor Tesla, in general, do not know that an extended dataset, including the S and X models, in all markets, would be much more representative.
We did a survey of the Tesla owners on Electrek (although not scientific, but with thousands of data points) and it is clear that the majority of people actually used Tesla's retail sales staff in the buying process and that almost half of them have made a try:
The future of sales is definitely online. I do not argue against that. But the transition is different for different types of products and cars will probably be among the last types of products to be put online only.
Tesla's retail sales force is undoubtedly an important part of Tesla's sales efforts.
Elon says sales are always online only:
"To be clear, all sales around the world will still be made online, as potential Tesla homeowners entering the stores will simply see how to order a Tesla over the phone in minutes."
Having myself witnessed several Tesla sales in the stores, it 's practically the same thing as before, when Tesla consultants were guiding buyers through the experience of. purchasing the configurator.
Ultimately, this online information strategy does not appear to have a significant impact on the daily work of Tesla's retail staff. They are still expected of them to conduct driving tests, generate sales and try to match buyers with inventory vehicles.
The main difference for them is that their pay has been significantly reduced – 50 to 60% in some cases for Tesla's top sellers. It is a significant pay cut for significant lifestyle changes and incentives to find new jobs.
In fact, I agree that Tesla removes its commission, which could create a better sales environment, but you have to compensate by increasing their salaries if they do essentially the same job.
These people helped Tesla succeed and accelerated the transition to electric vehicles, which is part of Tesla's mission.
At the rate at which Tesla is growing, they should always have room in the business and be able to find other improvements in terms of efficiency in order to reduce prices.
After all, society is basically just a good person.
I think Tesla may need different leadership to revive his retail efforts after this dark period, which, I am sure, left a bad taste in the mouth of many employees .
Maybe Tesla should bring back George Blankenship. What are you doing these days George? Want a challenge?
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