Tesla’s Troubles Mount: Shuttered Showrooms and Sinking Shares

Yes but Ferrari has no intention of making their product affordable for those that want it, even if they were able to.

Tesla wants to offer an affordable car that more folks can afford. It's been making steady progress in getting to a lower price point, but there are still A LOT of people that would buy a Tesla if it were just a bit more affordable.

Indeed. It's worth noting that affordability is the inhibitor for nearly all non-worthless products.

you can. 1000 mile refund policy.

> without even being able to try the product?

People can still try it, just not for free and from Tesla. I test drove a Model S P90 in 2012 from the store in Toronto and it changed my life. I can't afford the car, but it was an incredible experience for me. The test drive storeperson told me at the end of the (safe) trip that I could not drive back into the car basement parking lot. The last person they let test drive it into the parking lot totalled the car. So now for test drives they limit it to street-level. Anecdote and maybe irrelevant.

But if I want to test drive one today, I'd just go to Turo and rent one for like $50 and then not have to worry about someone over my shoulder telling me I'm gonna be a bad driver.

I'm not suggesting Turo or whatever is a replacement for a test drive! But it's also not the case that interested buyers have to buy without trying first.

You don't need a show room for a test drive. The "schedule a test drive" page is still up on their web page,

Does saving $2,100 help? Oh and you can return it. And you can rent one on Turo if you don't want that hassle.

I don't know that it will work, but driving price down is often a very good move.

Maybe a younger generation who buys everything online and hasn't purchased a new vehicle before? I personally enjoy negotiating and driving prices lower, I'm also never in a rush to buy a vehicle. I can see the appeal of buying online though.

I'm with you on this. I have rented cars to try them out, and advocate the practice. But that represents more friction than a test drive, and buying/returning represents more friction than renting.

This is Hacker News. We all are supposed to understand that friction reduces the market for a product that carries uncertainty in the mind of its market.

It's not a dichotomy, it's not like zero people will buy a Tesla without a local test drive, but it is a certainty that _fewer_ people will do so.

The question is, "how many fewer?"

Does the 7 day return policy not alleviate those fears?

Or do you look at it from a perspective, I want a new car, have $40k to spend, let me test all the options, and being all-electric isn't a binary choice?

I think of it in 2 ways:

1) You have budget for a new car, shopping in the segment covered by Tesla offerings. You care not for its drive train and evaluating it purely on the car likeness. You go to different dealerships and educate yourself on different car features (as opposed to online) and test drive while you're there. Tesla not having retail presence hurts, for sure.

2) You do your research online, watching reviews on youtube, reading reviews in CR, etc. You are pretty certain you want car X, but want to test drive it to make sure. If that car is a Tesla, you have to buy it, knowing you can return it if something doesn't line up, getting your money back.

Oh yes. I am gut-level certain that the first-freeway-on-ramp experience of a Tesla test drive is a damn big push off the fence for a prospective buyer.

It does seem weird, and the fact that they’re closing stores they opened only months ago is a bad sign I think. The one in Dallas mentioned in the article was only opened in December, now it’s closed. That reeks of desperate cash-flow management at worst, wastefully bad spending at best.

Now maybe some younger folks will be happy ordering a car online and relying on a return policy, but that’s not going o be a population to support a company valued at what TSLA is. The Model 3 is more affordable than an S, but it’s still a big chunk of change for most people. Beyond that price range you’re selling a majority to older buyers who can afford it. Look at who is driving th average high end Mercedes, it’s usually someone who’s getting on in years. Are they really going to be Ok without even a test drive?

I’m in my 30’s, and no way in hell would I buy a car I’d never seen or driven, anymore than I’d buy a house without a walkthrough (at least). I think they’ve jus undercut their sales in a big way, and if it isn’t a desperation move, what is it?

I wouldn't buy without a test drive either, but having just bought a new car, I didn't test drive it at the dealership: I asked my neighbor around the corner if I could try his out, took it for a spin, and bought the car entirely online except to go to the dealership in person to sign some papers and pick it up...

Admittedly, you can throw a rock and bounce it off two or three Honda CR-Vs in my neighborhood.before it hits the ground, but I do know enough people with Teslas to try one if I wanted to.

So, I took delivery last week the day before the price changes. I went back the next day asking how I could work with them to find a solution since I was in the return window and now the product was $2.9k less expensive. That was a bummer, especially since FSD was 3k. I might as well push them because I was in the return window and the money could be used to purchase FSD. I was told by more than one service center experience employee that a full return was my only way to get a refund and then I should "just reorder at the new price."

Ok, so I returned. I was asked to reset the car, hand over my keys, and then told I was set to go. I had to ask, insistently, for proof that I had returned the car. They were just going to send me off with no letter, no email, nothing - just a literal IOU with no proof. I finally got a letter after some poking - it's one sentence that mentions my name and VIN but includes no financial details. I was then told the process will take six weeks.

So, while you can return, the process, in my opinion, is insane. Once you return, you're forced to wait for several weeks with no idea when, or if you will be refunded; even then you have no idea what they will actually send back to you. I am waiting for some undetermined period of time for ~$62,000 sent back to me ... I have no idea how they will actually send it to me.

Now, I really want to order another Model 3, but this whole process has been insane. I cannot see most people being comfortable with it. Ever.

Is that a tradeoff inherent to B2C models, or could they have done differently?

Those companies have largely failed to execute for the last ten years on EVs and their current offerings are still worse than Tesla in nearly every category.

Tesla seems to get disproportionately negative press - they just announced the 35k model the media had been complaining about not existing for years and now they're on to something else.

The dealership model does the existing manufacturers a serious disservice along with lack of charging infrastructure.

Tesla could still fail, but I doubt it'll be from competition.

In my mind, these big players need to sort out the fields where they're lacking years ago. I can think of about 4 off the top of my head.

1: Batteries and battery tech ( the supply field is limited and Tesla has the biggest leverage here )

2: Self driving, just way way way ahead of the competition you listed ( though i do think Japanese and European brands will start to catch up)

3: Supercharging network (way faster charging, way more coverage)

4: Operating system (Tesla's car is a comprehensive piece of code, the rest of the OEMs can't even send over the air updates for much more than their map, Tesla just gave its car 15 mile extra range for free, has fixed breaking issues in the past, etc... with software update)

And I just don't think they're agile enough to compete with Tesla.

I can't make my mind up on the closures.

I just think, in 5 years time when they're having to sell to average people, not just Tesla fans, how are they going to compete with everyone else. Is your Mum or Dad going to buy a (new fangled electric) car, on the internet, sight unseen?

Now its still not necessarily a bad decision now to be closing stores they don't need, but is it going to hamper them later?

Possibly. But not necessarily.

In any business, management needs to "inspect and adapt." Agile businesses do so more frequently. But change is not necessarily inspection and adaptation. It can sometimes be throwing things at the wall and hoping they will stick, without properly evaluating each of the things thrown at the wall.

Inspection and adaptation also works best when done with discipline. Experiments should are conducted with explicit falsifiable conjectures to test.

It may very well be that this course correction is the result of an experiment, and the results have been inspected, and Musk is adapting. or it could be a knee-jerk reaction to cash-flow problems.

I am not disagreeing that this may be a founder courageous enough to try experiments and abandon those that invalidate his conjectures. But I want to point out that drastic changes in and of themselves do not necessarily indicate the presence of "inspect and adapt" management.

Apple building retail stores seemed absolutely crazy at the time, but was clearly an interesting experiment (regardless of whether it succeeded, which it happens to have done). Shutting the stores down 2 years after the pilot stores debuted would have felt like Jobs was "winging" it when he came up with the idea.

Tesla's time between debut and shutdown feels less like an experiment than a bold cost-cutting move. At least with Apple, they knew they had strong product sales before doing dedicated retail. Obviously, Tesla will sell plenty online, but how certain are they of the impact of online-only?

??? What's the context? That The NY Times has published factually accurate articles about Tesla over the past 7 years?

If Tesla didn't want the negative coverage they could have avoided it all by simply executing their strategy properly instead of fucking up on some of the most basic details over and over again. Even if they had just executed adequately, the media coverage today would be very different.

82% of buyers, sure, but those were the most motivated buyers. People who have been on waitlists for years, or even (like myself) waiting since the Roadster was announced in 2007. It's a real stretch to assume that the next wave of possible owners are going to put up with buying a car that can't be test driven.

Almost all of Tesla's Model 3 orders came from their pre-order queue, which had to be done online (even in store, they simply directed you to an kiosk of their website.) before they even had Model 3s to test-drive. This means that the 78%/82% comes overwhelmingly from the preorder Model 3 buyers, and that as time passed more of the buyers were doing so through the stores.

Consequently, they're not losing "at most 22%" of possible sales, they're losing at least 22% of possible sales, likely more, since they're trying to target mainstream buyers that heavily prefer to test-drive vehicles before purchasing.

Sure, while locking up $35k to $65k for up to six weeks. Pretty damn expensive test drive.