Tesla is shutting down the bulk of its retail operations in favor of moving to an online-only sales methodology.
Tesla announced on Thursday that it would be ceasing all retail sales of its vehicles in favor of moving to an online sales platform. Tesla CEO Elon Musk explained during a conference call with the press that eliminating the retail sales portion of its business would represent a significant cost savings, allowing the long-awaited $35,000 Model 3 to .
Tesla representatives estimate that moving to online-only sales will save the company upwards of six percent in costs and as such, it’s passing that savings down to the customer. In addition to the announcement of the new low-cost Model 3, the company also stated that it would be dropping costs of Models S and X as well.
Naturally, eliminating this facet of its business will come with reduced headcount, though Musk stated enthusiastically that he would be working to significantly expand the Tesla service network headcount in order to improve the customer service experience there. He also stated that the service arm of Tesla was reporting directly to him.
It’s unclear how many of Tesla’s storefront locations would remain open as places where people could go to see and touch the cars in person, but in order to help reduce the need for these locations, Tesla has overhauled its deposit program. Now people can place a $1,000 deposit on their Tesla and drive it for up to 1,000 miles and still be eligible to return the vehicle if they don’t like it. Tesla is also working to streamline its deposit refund process to make this change run more smoothly for customers.