Tesla Puts The Brakes On Their Store Closures, For Now
Tesla is putting the brakes on its store closures and layoffs until the end of March. Recently alongside the new $35,000 Model 3 announcement Tesla also announced that they would be closing all their local stores and shifting all sales to an online-only strategy. This shocked many in the car world and even many Tesla employees working at those locations.
Following the announcement, Tesla has already closed 29 stores in the USA and Canada. Other locations not yet closed have been told to stop booking test drives with potential customers ahead of a proposed closure.
It's currently rumoured that Tesla has halted the store closures as a way to push out their current staff without the need to pay them severance. Along with the Model 3 & Store closure announcement Tesla slashed compensation and wages for Tesla Store employees. Tesla stated this was the only way they could sell the Model 3 for its lower price was to remove the overhead of store staff.
Halting the store closures till the end of March and reducing the store staffs wages is a way to push out employees and not pay severance, thus saving Tesla money in the short term. It's also a somewhat controversial way to save money.
It's still unclear how the store closures and this online-only strategy will work going forward. Tesla diehards are still expected to buy the vehicles, but others may be less likely. It's hard to buy a car without taking it for a test drive first, and without the stores, it's not possible unless you're close to a Tesla service centre. Tesla has also said you can order a car and return it within a certain number of days if you're not satisfied, but that's not even close to the same as a test drive.