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Tesla drives toward pure play track, will close most stores

Electric car manufacturer Tesla is shuttering brick-and-mortar stores in favor of good old-fashioned e-commerce.

In a corporate blog post announcing the release of the new $35,000 Tesla Model 3, the company said it is shifting sales worldwide to an online-only model. The post, attributed to The Tesla Team, cites Tesla’s need to achieve reasonable prices while remaining financially sustainable.

“You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide,” says the post.

To eliminate the need for a prepurchase test drive, Tesla will introduce the option to return a new car for a full refund within seven days or 1,000 miles of driving. Tesla also plans to introduce same-day or even same-hour service, mostly with technicians coming to customers, in all countries where it operates.

By shifting all sales online and continuing other ongoing cost efficiencies, Tesla estimates it will be able to lower all vehicle prices by about 6% on average. This enabled Tesla to achieve the $35,000 Model 3 price point earlier than expected.

Tesla said it will keep an unspecified “small number” of its approximately 130 U.S. stores in “high-traffic locations” open as galleries, showcases and information centers. Closures will begin in the next few months.

The blog post did not mention anything about possible layoffs or transitioning store employees to different jobs within the company. However, in a separate statement, Tesla CEO Elon Musk acknowledged some jobs will be eliminated.

“We will be closing some stores and that will be some reduction in head count as a result; there’s no question about that,” Musk said. “There’s no other way for us to achieve the savings required to provide this car and be financially sustainable. I wish there was another way, but unfortunately, it will entail reduction in workforce on the retail side, no way around it.”
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