Elon Musk wrote an e-mail to all of his employees today to clarify the company’s recent decision to close stores. The February decision disheartened many Tesla employees and raised concerns over the company’s future. In today’s missive, Musk says that successful stores will remain open.
Additionally, successful salespeople will stay on board in some capacity. The note implies that even if such salesmen work in stores that are closed, they can retain their job:
No one who is a major contributor to demand generation will be let go. That would make no sense. However, sometimes, in a company with 45,000 people, things happen that make no sense. I will do my best to remedy issues when brought to my attention directly or through [redacted email address].
Musk says that stores with low activity are like planting seeds in bad earth: it makes no sense. People in those areas who are interested will still be able to buy Tesla from the website, of course. Anyone can buy a car from Tesla that way – and even if you go to a store, that’s your most likely end-point.
Stores that are in a location with low visitation rates (ie empty most of their opening hours) and lead to low sales will gradually be closed down. This is analogous to seeds on barren ground. There is no reasonable way to justify keeping such stores open.
All sales will be made online, but the note clarifies that this will not negate the necessity of brick and mortar stores. Musk says:
[The Tesla experience is] very different from normal expectations for buying from other carmakers and is simply meant to emphasize that ordering a Tesla is super easy and can be done in 2 minutes from your phone or laptop at Tesla.com. Ordering a Tesla is not much harder than ordering an Uber, but hardly anyone knows this! […] However, many potential Tesla owners will still want to talk to a Tesla representative in person or want a test drive from a Tesla representative. Stores also have a small number of Tesla vehicles available to drive away immediately for customers that want a car right then and there.
Tesla’s fulfillment model is still different from most car manufacturers. Companies like Chevrolet and Chrysler distribute the overwhelming majority of their vehicles to dealers, who make them immediately available to consumers. Tesla buyers must wait for their order to be fulfilled, which can occasionally take some serious time.
Musk is currently in a fight with the SEC over his behavior, which has lead some industry analysts to lose long-term faith in the CEO. His Twitter antics so concerned SEC regulators that they wanted Tesla to pre-approve anything the billionaire said publicly . Fellow CCN.com contributor Wayne Duggan has opined that the Model Y will “not save Tesla.”