Tesla will only shut stores which are “empty most of the day”
Tesla’s chief executive Elon Musk has sought to clear up the confusion surrounding its plans for store closures and its shift online making a U-turn on his original plans.
In a memo sent to all Tesla staff seen by CNBC, Musk explains that any stores with “a high visitation rate and that lead to significant sales will absolutely not be closed down”, unless the store is in a location where rent is “absurdly high”.
Stores with low visitation rates “ie empty most of their opening hours” will be gradually shut down and stores somewhere in the middle will “be given a fair opportunity to prove their case”.
This follows an announcement at the start of March in which Tesla said it would be shutting all of its stores and move sales entirely online, in order to keep the costs of its new Model 3 as low as possible, and reduce the price of other models by six per cent.
Just over a week later, after around $8 billion had been wiped of the company’s market value, Tesla made a dramatic U-turn stating that half of its stores would now remain open and the prices of its cars would be reduced by three per cent instead of six.
Many sales staff were reportedly caught unawares by its initial announcement and have remained confused about their job prospects ever since.
In his memo Musk added that “no one who is a major contributor to demand generation will be let go” but suggested others who are not major contributors will be also be given fair opportunity to prove their case.
Furthermore Musk explained his plans to move online, adding that even in physical Tesla stores the act of purchasing will be done via the potential new owner’s phone or computer, demonstrating to them how easy it is to order one of its vehicles.