Physical Location ReductionFebruary 28th, 2019
And like that *poof*… they’re gone.
Bricks and mortar, physical locations, places where you can test drive a Tesla, they are no longer.
Tesla Model 3s are everywhere now. And by everywhere, I mean everywhere I go. Because I drive one.
At the unveil of the Model 3, they showed 3 different variations. It wasn’t until several months later that some started getting spotted testing in California. Think about that. Only a couple thousand people had even seen a Model 3 in real life. Now over 100,000 own them.
Physical locations seemed to make sense, as you would need some place to show them and fix them.
Car dealerships. The places where you go and wheel and deal. Elon wants that down to a minute. Configure your car, buy. Test drive? If you go through the process of buying the car and you don’t like it, Tesla will let you return it.
The thing is, buying the car is still a hassle. You need to get insurance and you need to get financing together. Buying the car is just one thing. And if becomes super seamless, then you will have to decide, do you want to return it, and cancel the insurance and cancel the financing and get refunded your money?
With a car that is that fun to drive, and if you apply gas savings on top of that and apply it to your financing budget, it’s hard to go back to gasoline. Very, very hard. What are your other options right now if you want to stick to electric after? Will Chevy let you test a Volt for a week? Would you be happy with a Volt afterwards?
The physical locations cost Tesla quite a bit of money. If Tesla can be run without them, then saving that money will definitely be good for the bottom line. Make the sales team minimal. Make Tesla staff minimal, or even volunteer. I would love to delivery people their cars. I would be happy for Tesla to make my place a drop spot for their cars. I would be happy to give a new Tesla driver an orientation. But they probably wont need it. They have probably seen it before from their friend. They probably know all about the car.
Tesla is taking the money they spend on having physical locations and keeping employees in those physical locations and reallocating those funds to service technicians and car delivery.
The worst part about buying a Tesla was the delivery process for me. My car got stuck in Detroit for 2 weeks and my delivery appointment was bumped twice. Aside from winter tires, I didn’t have any service on the vehicle in 8 months since I bought it. If they focus more resources on optimal delivery and service, there really isn’t any complaints for people to have. If they can make the cars more fun, more economical, more reliable, cleaner for the environment, self driving, entertaining, intermittently improving, and safer and they can do this before anybody else, then …
I am TSLA Long. Model 3 Owner. Brother of a Model 3 owner. Son of a Model S owner. I have reservations for Slate Roof and Cybertruck. I am a Tesla speculator and fanboy. I am not a financial advisor. Investing in anything comes with inherent risk.
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