The new fantasy sales framework will fail

[Skipdd]

The one thing I’ve learned in ~4 years of owning a Tesla is that with Tesla, change is constant. Appears eliminating sales and stores is a means to an end. Not saying I like all the aspects of it, but I’m confident that if large issues result from this more change will occur. As for me, when my current lease is up, I will likely find a way to get hands on/drive a Tesla prior to ordering a new one. I’m reasonably confident that won’t be an issue. If I had to trade between better service (including delivery, repair, parts availability, communication) and in person sales, I’d trade for service. I say that as a BD/Sales resource - yikes. Thankfully not in something remotely transactional..

 

[neroden]

$2500 to order. Rumor has the starting price at $85k. I'm expecting another $30k for options.

Jesus. Model S undercuts that substantially.

 

[GoTzillaR]

Jesus. Model S undercuts that substantially.

Well, I don't think they are direct competitors. A mustang undercuts a slower base 911 substantially. To each his own.

 

[whitex]

When a person completes a deal on a car with no test drive nor see it in person, he simply just needs a "Transportation", IMO.

If you just need transportation, it doesn't make sense to buy a Tesla, unless you like overpaying for things, since there are more economical transportation means out there. It's like, if you just want some food, you don't go buy a premium steak.

As for people who buy without a test drive, those are definitely not guys who just need transportation. Bugatti Divo sold out (at $5.8M per) on first day before the first production car left the factory. I sincerely doubt those guys are just needing transportation

 

[GoTzillaR]

If you just need transportation, it doesn't make sense to buy a Tesla, unless you like overpaying for things, since there are more economical transportation means out there. It's like, if you just want some food, you don't go buy a premium steak.

As for people who buy without a test drive, those are definitely not guys who just need transportation. Bugatti Divo sold out (at $5.8M per) on first day before the first production car left the factory. I sincerely doubt those guys are just needing transportation

Bugatti is an extreme example but I'd play. There are collectibles (Ferraris, Paganis, etc.) that are sold out before they were made. The buyers of those cars are treating their cars as toys and they won't spend time here.

 

[whitex]

Bugatti is an extreme example but I'd play. There are collectibles (Ferraris, Paganis, etc.) that are sold out before they were made. The buyers of those cars are treating their cars as toys and they won't spend time here.

Still, if ALL you need is transportation, you go for the most economical, unless you like to overpay for things

On the flip side of this argument, maybe Elon thinks Model 3's are collectibles?

 

[Phil Seastrand]

If ALL you need is transportation, use public transit.

 

[Barklikeadog]

If ALL you need is transportation, use public transit.

Assuming you live near a bus stop or subway

 

[bob_p]

There are multiple posts on the Tesla forum with concerns over Tesla's new online-only sales strategy.

We've purchased 3 Tesla vehicles in Texas, and because Tesla still can't sell direct in Texas, all of those have been online - and the process has only gotten better with each vehicle purchase.

Just like Tesla is adding the ability to monitor your service status through the mobile app - they will likely make improvements to their online store and monitoring of the production/delivery process. They should do what other online stores have done - adding chat and phone conferencing to augment their online sales.

And Tesla isn't the only one doing this.

The used car market is shifting to online sales - Carvana delivers used vehicles through their "vending machines" or to your front door.

And yesterday, our local paper had an article about the local dealerships beginning to sell their new vehicles online (though how that works with their price haggling process for negotiating discounts off MSRP isn't clear).

The auto industry has resisted the online sales model for a long time - and will now start to see the same transition other brick-and-mortar retail has seen.

 

[RogerHScott]

Tesla is correct in betting that very few people are going to return it.

I don't think that's the bet. The bet is that enough people are still willing to buy with this as the "compensation" for no pre-sales hands-on experience.

 

[RogerHScott]

I'm puzzled about the numerous suggestions here that the money saved by closing B&M stores will be used to improve service, given that Tesla announced the closing of service centers. What evidence can people cite that Tesla is emphasizing service rather than, say, emphasizing the avoidance of bankruptcy?

 

[StealthP3D]

I'm puzzled about the numerous suggestions here that the money saved by closing B&M stores will be used to improve service, given that Tesla announced the closing of service centers. What evidence can people cite that Tesla is emphasizing service rather than, say, emphasizing the avoidance of bankruptcy?

I didn't see that announcement (closing of service centers). I saw they were closing showrooms.

Do you have a link?

 

[Skipdd]

I didn't see that announcement (closing of service centers). I saw they were closing showrooms.

Do you have a link?

+1

 

[RogerHScott]

I didn't see that announcement (closing of service centers). I saw they were closing showrooms.

Do you have a link?

It is possible that some coverage was reading too much into: "[Musk] also said Tesla is working to do more work at customers' homes and offices, rather than having them bring cars into the service centers".

I still think that, given their financial struggles, Occam's Razor says you don't need to assume the savings are going to be spent on increased service to justify or explain those savings -- they simply need to spend less money to stay afloat. If they do improve service, that'd be great, but I'm not holding my breath.

 

[Surfer]

$2500 to order. Rumor has the starting price at $85k. I'm expecting another $30k for options.

A charging network with a lot of charging stations at car dealers....NO THANKS!

 

[StealthP3D]

If they do improve service, that'd be great, but I'm not holding my breath.

The stated reason for closing sales showrooms is to free up capital to expand their servicing capabilities. There is no reason to doubt them on this point unless you just want to spread FUD.

 

[GoTzillaR]

The stated reason for closing sales showrooms is to free up capital to expand their servicing capabilities. There is no reason to doubt them on this point unless you just want to spread FUD.

Not exactly. Tesla is closing showrooms and moving to online only so they can lower the price on their cars. Tesla to Shutter Stores In Favor of Online Sales - Tesla Motors Club

 

[StealthP3D]

Not exactly. Tesla is closing showrooms and moving to online only so they can lower the price on their cars. Tesla to Shutter Stores In Favor of Online Sales - Tesla Motors Club

Yes, this will make the cars more affordable and allow Tesla to invest in better service for all the new Tesla owners out there:

Tesla will close most of its stores and only sell cars online

"Tesla will “significantly” increase the number of service centers to meet the demand of its growing customer base, Musk added. The company offers mobile service, in which Tesla-branded repair vans can be summoned through the Tesla mobile app. Musk said the company’s service team would now report directly to him, with the goal of providing same-day service to all Tesla owners. "

Tesla Is Finally Building the Car It Always Promised, and Nobody’s Happy

"Despite the store closures, Tesla said Thursday that it will increase investment in service, with most service now done by sending Tesla representatives to drivers, rather than having them bring their cars in to the shop. "

Tesla to close showrooms and move sales online - automotiveIT International

"At the same time, the electric carmaker said it was increasing its investment in the Tesla service system. It said it was changing its parts distribution approach to ensure spare parts were available in a timely manner at all service centres globally, and also that it was aiming to send aftermarket service engineers to the customer on the same day any service was requested."

"In its full year results update, the company said it would double service capacity where needed by moving to a two-shift operation, as well as simplifying processes to increase service throughput."

This is good news as we all heard how busy the service centers were around the end of last year.

 

[clyjr]

If you bought from Hendrick BMW, then they charged you $699 do to all of that paperwork for you... I haven't bought a new tesla so I don't know if they charge closing and administrative fees, but just pointing out that those dealers that do all of the work for you don't do it for free...

Maybe that's a new business opportunity, filing DMV paperwork for auto buyers...

You REALLY only spent 2 hours to buy a car, getting a loan and selling your car? Man, you should become a consultant and teach your process to car dealers everywhere. You ll make millions!

(adding an aside here... really just on selling car alone, assuming you don't shop around, and just drive to carmax and have it assessed and take whatever they give you, takes more than 2 hours)

There are also lots of time consuming stuff after all that's done too and Tesla does a really terrible job at those. For example getting title work to customers on time (so their temp tags don't expire), DMV stuff, state fees, taxes, licence plate etc. When you buy online, you have to take care all of those which can take hours and hours (and physical time to go to those places).

For my last BMW, the dealership took care all of that. So literally the total time for me to buy a car, sell mine, get financing, and all paper works done was the amount of time I spent at the dealership. It's MUCH less than buying a Tesla online and dealing with all those paper work on my own. Buying online was a huge hassle way way more complicated than filing taxes. Honestly I don't think the average person can complete those tasks without messing up somewhere.

 

[muleferg]

zerOcool. The Charlotte sale's store could not sell you a car. You had to buy it online. You can find more about Tesla's online than any of the sales man/women that work there. I have purchased 1 S (sold) 2 X , P3 and helped a referral with his X . all online.