One theory I'm seeing floating around is that this whole event was orchestrated to remove sales commissions from the sales staff. Which would reduce margins for sure, but piss off the work force. Work force is still pissed off, but maybe less so, because they aren't getting laid off. Still, this whole even seems very bad for sales morale.
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EDIT: "The looks like a duck / quacks like a duck" simple explanation is that leadership expected the retail store leases to be cut out from their expenses. But then those store locations were going to be forced to stay open.
In combination with some pretty big loans (Deutsche Bank, China Gigafactory 3, Model Y Deposits), Tesla now has a bit more money than it was expecting, so they can pay their sales staff and such a bit longer than they initially thought.
My guess, which isn’t based on anything is that Tesla got pushback from potential buyers who didn’t like the idea of having to buy outright and then having to return an item for a refund if it wasn’t to their liking (that’s a pretty big hump).
There is much more peace of mind knowing that there is zero monetary commitment when going for a test drive. That’s not to say there aren’t other pressures, but that’s more psychological than anything else.
> There is much more peace of mind knowing that there is zero monetary commitment when going for a test drive.
Yeah. If I were buying a Tesla (which btw... I don't plan to buy any vehicle for another ~5 years or so...), then I'd be wondering if the return would refund my deposit... or if it'd refund the "delivery charge". Etc. etc.
There is a lot of fine-print there: I have severe doubts that the full price would be refunded. I mean, lets say I test drove the vehicle for 147 miles and then returned it. Who the heck would buy a "new" Tesla with 147 miles on it? So I know the value of the car has dropped significantly. I can't believe that Tesla would accept the car back without taking some cost to recoup the lost value.
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On a true test drive, there's no documents to sign. And the test drive is for a very short are (just a couple of miles). Its expected for vehicles to have ~20 to 40 miles on them due to test drives when you get them from a dealership, so the short test drives aren't a big deal at all.
Generally, companies evaluate the impact of a potential decision, and then announce the decision publicly. It seems like Tesla likes to announce decisions publicly, and then evaluate the potential impact.
I think I understand the reasoning for closing down most store but I simply don't get the "buy it maybe return it" thing.
I recently was shopping for a new car, Tesla Model S was on my list of potential vehicles. I test drove one and knew within a few minutes it was not the car for me.
If I had bought the car without a quick shakedown I would have certainly returned it but then I'd be stuck without a car for several days or even weeks since my credit/funds would have been tied up.
Why didn't they instead offer the 7 day try out but hold the car on some sort of deposit? This way if I returned it I'd only be out that deposit for the time being and would be free to immediately buy the car I wanted. If I chose to keep the car they would follow up with purchase.
Or for areas that are more dense with available cars to rent. Offer a rental Tesla for a day for some discounted rate to be refunded if you bought a car.
I don't think they thought this through very well.
>Why didn't they instead offer the 7 day try out but hold the car on some sort of deposit? This way if I returned it I'd only be out that deposit for the time being and would be free to immediately buy the car I wanted. If I chose to keep the car they would follow up with purchase.
Same car can be used for test drive by a lot of people, while you can only have one buyer of a new car. If they give you a new car and you return it with 200 miles on the clock, is it really new anymore? How many of those returns 'till it's second hand?
IMO, the bigger issue is the flip-flopping. It shows that not enough thought was put into the initial decision to close stores. How many other, non-visible decisions are being made on a whim?
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[ 2.5 ms ] story [ 29.0 ms ] thread------
EDIT: "The looks like a duck / quacks like a duck" simple explanation is that leadership expected the retail store leases to be cut out from their expenses. But then those store locations were going to be forced to stay open.
http://fortune.com/2019/03/08/tesla-close-retail-stores-laws...
In combination with some pretty big loans (Deutsche Bank, China Gigafactory 3, Model Y Deposits), Tesla now has a bit more money than it was expecting, so they can pay their sales staff and such a bit longer than they initially thought.
There is much more peace of mind knowing that there is zero monetary commitment when going for a test drive. That’s not to say there aren’t other pressures, but that’s more psychological than anything else.
Yeah. If I were buying a Tesla (which btw... I don't plan to buy any vehicle for another ~5 years or so...), then I'd be wondering if the return would refund my deposit... or if it'd refund the "delivery charge". Etc. etc.
There is a lot of fine-print there: I have severe doubts that the full price would be refunded. I mean, lets say I test drove the vehicle for 147 miles and then returned it. Who the heck would buy a "new" Tesla with 147 miles on it? So I know the value of the car has dropped significantly. I can't believe that Tesla would accept the car back without taking some cost to recoup the lost value.
-------
On a true test drive, there's no documents to sign. And the test drive is for a very short are (just a couple of miles). Its expected for vehicles to have ~20 to 40 miles on them due to test drives when you get them from a dealership, so the short test drives aren't a big deal at all.
I recently was shopping for a new car, Tesla Model S was on my list of potential vehicles. I test drove one and knew within a few minutes it was not the car for me.
If I had bought the car without a quick shakedown I would have certainly returned it but then I'd be stuck without a car for several days or even weeks since my credit/funds would have been tied up.
Why didn't they instead offer the 7 day try out but hold the car on some sort of deposit? This way if I returned it I'd only be out that deposit for the time being and would be free to immediately buy the car I wanted. If I chose to keep the car they would follow up with purchase.
Or for areas that are more dense with available cars to rent. Offer a rental Tesla for a day for some discounted rate to be refunded if you bought a car.
I don't think they thought this through very well.
Same car can be used for test drive by a lot of people, while you can only have one buyer of a new car. If they give you a new car and you return it with 200 miles on the clock, is it really new anymore? How many of those returns 'till it's second hand?
https://www.wsj.com/articles/landlords-to-tesla-youre-still-....