Tesla will close most of its stores and only sell cars online
theverge.com
theverge.com
Call me old fashioned, but that is in no way a better alternative to a test drive prior to commitment.
While helping someone pick a car recently, we test drove two different models of car from the same company multiple times as well, to decide which one was the right one. It's not like Tesla's going to send out a Model 3, a Model S, and a Model X and let me try all three.
You're trying to optimize for buying the cheapest Tesla that will work for you. Tesla is trying to optimize for making the most money they can from you. If you can not only afford a Model X but are seriously considering it, why would they put effort into possibly selling you a Model 3?
Why not let me pay to rent a car, like a normal rental car place, and pay per day.
Would be cool to do anyway, but I bet a lot of people would end up falling in love with the car that way and become owners shortly after.
There are a lot of people who just want a Tesla. They're not shopping around to find the best car. Offering a refund means those people can buy with confidence, knowing they can return it if it's not all they expected.
In Europe, cars are pretty personal items, and typically only insured for one or a few drivers. Lending your car to a friend for a day would typically involve hours on the phone to the insurance company and a few hundred euros of fees. There are apps (cuvva) which try to reduce this, but even so it'll probably be cheaper and less effort to call an Uber rather than borrow a friend's car.
In the USA, loaning a car to a friend or neighbor seems far more common.
Here in Italy insurance isn't particularly cheap, but there is normally no limitation whatever about "insured driver(s)", as long as the driver has a valid driving license the insurance covers accidents. (and yes you can lend your car to a friend without calling the insurance) and though I have no direct experience (as car owner), France and Spain afaik work the same.
It's almost always third party only - legal requirement - cover, unless you have notified the insurance and got approval first. That would usually need you as registered owner, and paying a premium, or even higher fee for not being keeper.
So I can borrow a car, get home legally, and if I cause an accident the other parties have cover against which they can claim. That's it. If it's stolen while in my care or I drive into a tree, no cover. If it catches fire, no cover. If I bash the door on a bollard or seize the engine, no cover. No cover for any of the things that might normally happen lending the thing to a friend.
I would be very surprised to learn you get full comprehensive insurance on any borrowed vehicle. That would make insurance premiums trivial to game.
Yes, we are talking different things.
The one you just described is a kind of "all risk" (which is commonly called "KASKO" here), it is actually rather "rare", only some firms/businesses use it for their fleet and - sometimes - private citizens for "high range" cars (such as a Tesla or a Porsche 911 might be) that are more susceptible to vandalism or theft.
But there is still a difference seemingly.
If a car is insured for fire, it is insured for fire.
If a car is insured for theft, it is insured for theft.
The above two are NOT connected in any way to the driver.
If a car is insured for "own damages" (such as running the car into a tree) , it is insured for "own damages" and in this case there might be limitations on the drivers (or an even steeper insurance tariff/rate for a "anyone driving is covered anyway").
Yet it's those policies that tend to cover driving other vehicles. The Third Party, Fire and Theft only policies are usually named vehicle only.
Sounds like there's quite different standard ways of doing it. :)
I think this is a smart idea. They can focus this money on creating more superchargers. That sells a lot more than a 20 minute test drive.
No, they expect you to buy all of them in parallel and return all but the one you want.
I mean, it’s the model lots of people have been using with clothing since online discount retailers with generous return policy started undercutting brick-and-mortar.
Buying a new car for $$$ (I keep them for at least 10 years, currently 14) is a pretty big commitment for a 10-20 minute test drive.
Imagine getting married after a 20 minute date.
I rented a model S for 2 days, I was still learning things about it when I returned it.
All 3 cars were pretty hot at the time, all 3 won car of the year or similar awards in the year I got them. I suspect if cars are in demand (and don't spend many days on the dealer lot) they minimize the test drives. If they spend months on the lot they are more generous with the test drives.
The policy is about giving more time to return the car if the customer didn't do a test drive before.
At Model 3's early days, a lot of people bought the car without having the option to take one out for a test drive.
Amazing when Silicon Valley discovers other businesses do things for a reason.
No sales gimmicks, no false advertisement, no BS back and forth, no wasted time, etc. That alone would be reason enough for me to buy even a Toyota from them.
If I rent a Tesla then within 1 year of the rental I buy one then Tesla discounts my purchase the cost of a day of the rental.
It’d be a great strategy and cover the costs of the dealer network.
Test-driving is the only reason dealerships even needs to exist. Unfortunately even most vehicle renters only stock a handful of models (typically less expensive trims).
Online sellers need to get together and open up test drive locations. They don't sell from there, just let you figure out what you'll order online.
Dealers are like legacy taxis, just dying to be disrupted by something much better.
What Tesla refuses to do is sell to the public for one price and to distribution channels for another, lower price.
If there's an unmet need with sufficient profit opportunity, the only thing possibly holding back entrepreneurs is supply.
The usual way to discriminate is by selling to businesses through a separate distribution channel with separate contractual controls. But to convince businesses to purchase through that channel you either need to sell into the channel at a lower price or otherwise provide some value-add. But that's exactly what Tesla refuses to do--sell through multiple channels.
The fact that so many states have laws saying Tesla is not allowed to open a store is ridiculous.
Notably:
> We will accept your vehicle for return if the vehicle: Has an odometer mileage of less than 500 miles at the time of return;
> ...Is in new condition, without damage or abnormal wear and tear...
> To return the vehicle, you will need to deliver the vehicle (including all original equipment and any parts and accessories that came with the vehicle, including the mobile connector kit) to us at a Tesla Sales or Delivery Location (or other location that we agree to), and complete a vehicle inspection...
...but these terms describe a 1-day process for test-driven vehicles and 3-day process for not-test-driven vehicles, so it looks like they haven't updated the page yet with their new return policy.
Regardless, it looks like they're planning to just eat any costs from returned vehicles. They're probably gambling that the people serious enough to complete a purchase for one of their cars aren't likely to return it full of grease stains, french fry smell, and 900 miles later.
So lets suppose, you sold or traded in your old car and then bought a Tesla that it turns out that you don't like. What will you do then?
It's a classic silicon valley style move on their part: get out of the games you don't want to be in. In this case, the business of car dealerships not being the same as the business of car manufacturing.
Besides, the long play of Tesla is likely not in Tesla branded cars at all. They are slowly making the IBM move where they own and license the tech that other companies rely on.
The legal responsibility of autonomous vehicles and the long term warranty responsibilities of batteries as they decrease in capacity sounds like a terrible business to be in.
A, say, Ford "with Tesla tech" is likely worth substantially more in the mind of the consumer then one without. Pushing off the responsibility of the first point of contact is invaluable for a scaled business.
The bigger market than your own line of cars is to make the parts that all cars use.
It's the best powerplay they have access to in the market position they've formed.
There’s a certain caché that having a brick-and-mortar retail presence adds to a luxury brand, that wouldn’t be possible otherwise. It gives people, especially prospective customers, something physical to connect with when dealing with the company, and it stands as a marketing piece on its own. For many people, an Apple retail store communicates Apple’s ethos and vision far better than their website does.
The Tesla store in the mall near my house is fun. My kids love going there and sitting in the different models, and my son knows how to trigger all the Easter eggs, like making the X falcon doors dance.
At the same time, I have zero use for the store now that I’m an owner, and I had zero use for the store in actually making my purchase. The test drive that I did finally do of the TM3 (after I had already put $3,500 down and was entirely certain I would be buying the car) was actually underwhelming because I didn’t get nearly enough time with the car to really appreciate it, nor get to drive it in any kind of interesting terrain.
Actually driving my own TM3 on the other hand blew me away from nearly the first moment and still does.
I wonder how many owners are like me in that with the massive quantity of YouTube videos and reviews, already knew with certainty a TM3 would be their next car without actually needing to drive it? BTW, I’ve never had that with another car, and never would have dreamed of buying a car without driving it, before Tesla.
At the TM3 base-range $35k starting price, I think the vast, vast majority of people who “trial” one will keep it. This is particularly true if you’ve already made any kind of actual arrangement to charge it at a decent kW rate.
I would add that they need to have a trial mode of the full auto-pilot functionality, and also perhaps the ability to pay monthly for auto-pilot software subscription rather than bumping up the sticker price. This would also help with reducing sales tax and excise taxes I think.
I just hope the car-buying public is ready for this. Tesla will rely heavily, extremely heavily on word of mouth without a way for people to easily get in and touch and test drive a model with no commitment. Luckily I give test drives to everyone I know who I can talk into it, and I’m guessing most owners act the same in an effort to evangelize.
But as they try to go more mass market and compete with the Accords and Camrys, as they have less of the evangelical early adopters, will that target market a) have the charging infrastructure readily available, and b) really be willing to buy purely online and sight unseen?
I want this to work, and fear that it won’t. They are pushing so damn hard to get to that $35k price point with any kind of margin left over. If they had another year of process improvements maybe they could do it even with the stores. Without a store they can pull forward a profitable $35k TM3 several months at least. So it makes perfect sense while still being a huge gamble. Wild ride.
I doubt they would plan to yo-yo the stores closed and open again.
It reminds me of when he decided, "we can make a factory with so much automation that we don't need all that room for human workers...oh, sh*t, we can't produce enough, I guess I need to make second factory space with more room, so that we can have human workers involved more."