How long will Tesla's current retail model be feasible?

[action7981]

I have "worried" about the size of the stores. Seems shortsighted to make them so they cam barely fit one Model S.

I've had the same thought. It looks like most of the store locations can fit two cars at most, which is fine for Model S & X, but what about when Bluestar and Roadster 3.0 arrive in 2015-2016? Are they going to adopt a similar structure as service centers where they have small locations in high traffic areas and then larger regional retail locations?

Tesla's retail model apparently is 100% to deliver built to order cars and not to hold any stock whatsoever...So even when Bluestar comes out, customers will go into the Tesla Store find out what options they want (if this is not possible they will configure using online tools), configure the vehicle, write a deposit check, wait a few months till the vehicle is built, set up delivery, take delivery of the car and pay the balance. You really do not need a large sales floor or retail area to execute this business strategy. The only unknown is test drives, but it is pretty obvious at this point Tesla will implement a traveling road show where Tesla will bring test drives to a central place (i.e. hotel etc) where several potential customers can test drive the vehicle at this venue, rather than at the actual retail store location.

As you noted the test drive and ability to sit in a car and get a feel for it is going to be a problem. If they don't have store locations that can fit all of their models I don't see the average car buyer going out of their way to find out when the next road show will be just to see if they like it and are interested in ordering. As has been mentioned before, if they want to get past the niche manufacturer and sell cars in significant volume they are going to have to have easy access to all models. Maybe they will be able to keep a variety of models nearby for easy test drives. We will just have to wait and see once they are selling more than two models.

[Citizen-T]

I imagine they will have inventory nearby, and they will call over and have someone bring a car for the customer to test drive that is to their specifications.

[strider]

Well, that's one good thing about renting space. If your needs change you just move. Once they are moving higher volumes they will be able to afford larger mall stores if that's what they want to stay with. I like their setup at Santana Row where they have the retail shop and just behind it is a parking garage with dedicated Tesla space where they can have demo cars for test drives. They could potentially even have a few cars "in-stock" for the gotta have it now folks.

[Citizen-T]

Could you imagine a Macy's sized Tesla at the mall? Indoor test track anyone? lol.

[vfx]

Well, that's one good thing about renting space. If your needs change you just move.....

Still though, the remodels are in the 1M to 2M range. That's a lot of cars to sell.

[Mile Erlic]

A mall store is brilliant! A few demo cars of each type in the mall parking lot is all that's needed. When a prospective customer wants to test drive, a Tesla rep meets the customer at a mall entrance and they go for a spin. That part is great, but sometimes I wonder how they will deliver all over the country - that can't be cheap?

[jerry33]

That part is great, but sometimes I wonder how they will deliver all over the country - that can't be cheap?

Presumably they will batch them by area and then deliver them individually from a local depot. It shouldn't cost any more than shipping any other kind of new car.

[Citizen-T]

Tesla Opens East-Coast Store Ahead of Model S Rollout - Drivers Seat - WSJ

I love this quote from GeorgeB:

I hope people come in, learn about our cars and buy one in the next 10 years

[vfx]

Tesla Opens East-Coast Store Ahead of Model S Rollout - Drivers Seat - WSJ

I love this quote from GeorgeB:

Sounds like it holds 3 cars. A medium sized store for Tesla.

By the way.

That baby is just creepy.

[daniel]

Having a centralized inventory that can deliver within a week is okay, as I don't think most people would complain about being unable to just drive it off the lot. But a three-month wait would lose the business of the people who wait for their old car to break down before shopping for a replacement. Whether this would be sufficiently offset by the cost savings, I do not know. As long as production is well below demand, they'll sell all the cars they can build no matter what their sales/distribution strategy is. But once they try to go mainstream as per their dream to fill America's and the world's garages with EVs, they'll have to make it easier to buy a Tesla.

Test-drives are a similar matter: We enthusiasts will go wherever we have to, whenever we have to, to test-drive. But once they're trying to entice Joe Sixpack into a Tesla, they'll need a way to offer him a test drive at his convenience. An on-line "design studio" is no replacement for seeing the actual cars, in all the various colors, and sitting in it and then driving it. I crossed the Honda Civic Hybrid off my shopping list, even though at the time I much preferred Honda over Toyota, as companies, simply because Honda did not have a demo that I could drive. Traveling from Fargo to Minneapolis was out of the question. I flew from Spokane to Seattle to test-drive the Roadster, but that's because I am a die-hard electric enthusiast.

The mall store concept can work, but they'll need a way to offer test drives, and they'll have to fulfill orders on the time scale of a week if they want to go mainstream. And they'll need service centers no farther from owners than those owners would typically commute to work. Because they'll be competing with Nissan and other makers who have dealerships everywhere. For all the disadvantages of the dealership model, most Americans will demand local access to service. I'm paying $600 just in Ranger mileage for my annual service, but Joe Sixpack will not agree to that. Tesla will need a LOT more service centers when it rolls out Bluestar, or it will be a non-starter outside of the service areas.