Tesla to close stores, take orders for a $35,000 Model 3

Tesla to close stores, take orders for a $35,000 Model 3

Tesla stunned the automotive world after its reservations list for the promised $US35,000 Model 3 ballooned to over half a million orders in 2017.

When Gary Bornstein spent $52,000 for a Tesla Model 3 last summer, he did it without taking a test drive or even seeing the auto that he now owns. "People want to buy things online".

There is still more to the story. But Tesla's initiative could push online vehicle shopping even further. For the working class, the future is self-driving taxis and shuttles that cost a small fraction of owning, fueling, insuring, maintaining, parking, and repairing a auto.

The Tesla CEO teased the announcement Wednesday in a cryptic tweet. Customers are becoming increasingly comfortable making purchases online, and that is especially true for Tesla - which is a testament to the products we make.

Tesla had $US3.7 billion in cash and cash equivalents at the end of December. However, that just is not Tesla's style.

Tesla accused of providing unsafe, fire-prone batteries. Let's go through a simple back-of-the-envelop exercise. Now, Tesla probably will not have the capital to do that.

And the used-car site Carvana, which does sales totally online, more than doubled its sales a year ago to over 94,000, even though it started selling vehicles in 2013.

There are five Tesla stores in Australia, which will likely be closed. And while that all sounds absurd, it might just make sense for this particular electric vehicle company.

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In a 2018 Twitter post, Musk confirmed that Tesla would undergo a "difficult but necessary" reorganization that would see approximately 9 percent of employees losing their jobs.

Founded in 2003, the company, which makes sporty electric cars and SUVs, broke the mold of automakers from the start by selling vehicles only direct to consumers. It will be interesting to see how many Model 3 owners trade in for a Model Y or a Tesla Pickup, and then to see their Model 3 become a self-driving taxi.

Tesla pointed to its overall customer satisfaction rating from the magazine and said it has corrected numerous problems found in the survey.

Tesla's story may yet have a happier ending than Old GM's.

"Electric vehicles now make up only about 2 per cent of global sales, and while we believe that number is likely to grow, we believe there is an education process that is crucial for new customers around charging, range, and other features that are unique to Tesla that will not be as readily available without the in-store experience".

We are unsure as to how potential customers who are new to the brand, or EVs in general, will be able to try before they buy if online purchasing becomes the primary option.

Depending on specification, Tesla is giving guidance that deliveries will start in two to four weeks. For the customers, this should them at least help them plan their life around not having their Tesla. If anyone interested in organizing such as event, I would love to cover it.

But it hasn't all been good news: Tesla announced it was laying off about 7% of its full-time workers in January.

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