Elon Musk on Wednesday emailed all Tesla employees to clarify details about the company’s plan to close many of its retail stores.
Tesla’s February announcement that it would close stores and move sales online — plans the company walked back slightly in March — took many employees by surprise and had a huge effect on morale, workers told Business Insider at the time.
In his email, a copy of which was seen by Business Insider, Musk said that stores with lots of traffic would “absolutely not be closed down” but that stores with fewer sales would “gradually be closed down.”
“This is analogous to seeds on barren ground,” Musk said in the email. “There is no reasonable way to justify keeping such stores open.”
Tesla did not immediately respond to a request for comment from Business Insider.
Last week, Musk said in another companywide email that everyone’s “primary priority” should be getting cars delivered before the end of the first quarter, this Sunday.
Musk said in the Wednesday email that while all sales would still be online, that’s not the only part of the transaction.
“Unlike buying from other carmakers, ordering a Tesla doesn’t require any *physical paperwork*,” Musk said, adding that “many potential Tesla owners will still want to talk to a Tesla representative in person or want a test drive from a Tesla representative.”
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Here’s the full email:
From: Elon Musk
To: Everybody
Subject: Tesla Stores & Sales
There still some uncertainty around Tesla stores and the sales team. Hopefully, this note clears things up. Please let me know if there is anything I’ve forgotten to address.
- Stores with a high visitation rate and that lead to significant sales will absolutely not be closed down. It would not make any sense to do so, except in rare cases where the rent is absurdly high. Moreover, Tesla will continue to open stores throughout the world that meet the above criteria.
- Stores that are in a location with low visitation rates (ie empty most of their opening hours) and lead to low sales will gradually be closed down. This is analogous to seeds on barren ground. There is no reasonable way to justify keeping such stores open.
- Stores that are somewhere in the middle will be evaluated over time to see there is some way to allow them to cover their costs. If there is, they will remain open, otherwise not. However, these stores will be given a fair opportunity to prove their case.
The above principles also apply to the sales team. No one who is a major contributor to demand generation will be let go. That would make no sense. However, sometimes, in a company with 45,000 people, things happen that make no sense. I will do my best to remedy issues when brought to my attention directly or through [redacted email address].
What is meant by “all sales will be online” is just that the act of purchasing a Tesla will always be done via the potential new owner’s phone or computer. This is true whether they are at home or in a store. Unlike buying from other carmakers, ordering a Tesla doesn’t require any *physical paperwork*.
This is very different from normal expectations for buying from other carmakers and is simply meant to emphasize that ordering a Tesla is super easy and can be done in 2 minutes from your phone or laptop at Tesla.com. Ordering a Tesla is not much harder than ordering an Uber, but hardly anyone knows this!
However, many potential Tesla owners will still want to talk to a Tesla representative in person or want a test drive from a Tesla representative. Stores also have a small number of Tesla vehicles available to drive away immediately for customers that want a car right then and there.
This is why stores and Tesla product specialists and owner advisors will always be of critical importance to our long-term success.
Thanks,
Elon