Tesla shitcanning showrooms and service centers...
 

https://www.tesla.com/blog/35000-tes...-available-now

But you can buy a $35k Tesla now.

They are expanding service, not closing them.

But they are shifting all sales online and closing showrooms... Apparently keeping some galleries (ie a place to go look, but not test drive...). Not a big deal for me - both of mine were done online.

I’m curious when the increased range update will arrive. 15 more miles for existing cars. I’m thinking that Tesla under rated th 3 originally to see how battery degradation went with the different chemistry used in the 3. They must have felt they could uncork the hidden range without people worrying about degradation now...

And no test drives.

The Tesla Distortion Field was a topic of conversation at dinner tonight. Interesting times.

I would never have bought my car without the test drive. I went on 3 actually. Are there really that many people who buy without driving?

Also note, they fancier variants keep getting cheaper. I could buy my car today for less than I paid even with the tax incentive cut in half. Or complete eliminated.

ZBB, where do you see the 15 mile range thing? This is what I found. (cue autocross clsssing rant by clyde)


"We’re also excited to announce that we’re implementing a number of firmware upgrades for both new and existing customers. These upgrades will increase the range of the Long Range Rear-Wheel Drive Model 3 to 325 miles, increase the top speed of Model 3 Performance to 162 mph, and add an average of approximately 5% peak power to all Model 3 vehicles."

I misread it. Range increase is only the RWD...

Semi-related: Jason the engineering explained guy traded his RWD model 3 for the model 3 performance because of the throttle lag Tesla programmed into the RWD models. He explains it in this video while making liberal use of the fart app. :lol:

The instant torque was one of the things that sold me on the car. There's no way I'd want the car if it was laggy.

https://youtu.be/XzspO4-T7t4

Stuff like the fart app and the other dumb easter eggs are a major turn-off for me. But whatever.

I didn't realize that "no test drives" is now a thing. The announcement of the shorter-range, $35k model 3 was intriguing to me. It's nowhere close to worth $60k or whatever they want for the top trim levels, but around the same price as a Bolt? Uh, yeah, that's interesting. But if I can't drive it? Definitely not.

He claims you have a 7 day, 1000 mile return period. Not sure what the fine print looks like but in theory you can take an extended test drive before you’re “committed”, and return it if you don’t like it after trying it out for a few days, but you do have to pay in full before you get to do that. :)

Which is a whole lot of "fuck you" to your customers. But I get that's beena thing with Tesla from day 1.

I agree with you, was just clarifying that *technically* you have an out. I would never do it though. I know this has basically become a Tesla forum these days and the cars do intrigue me too but the whole sales/service model and Elon’s ego turn me off from ever wanting to actually buy one.

They have a huge bond payment due today, and as of right now no SEC filing showing it is paid.

For me they're neutral. I could certainly do without them, but it's hard not to laugh sometimes as well.

Funny, for me it's the opposite. A mediocre performance, laggy car that will be a huge pain in the ass because I can't drive it on normal length trips? Not appealing.

But a stupid fast car with instant throttle response and the range to do most of my normal driving? That's checks the right boxes to be worth considering for me.

If it really is "laggy" (how is this a thing for electric cars?) then I agree that would be a deal killer.

The issue for me is cost. I'm just not willing to spend $60k on a car. I don't care if it's stupid fast. Even a base 3 will be faster in the real world than anything I currently own. And I realistically will never desire to take it on a trip. I've got the Boxster for trips with Marisa and I've got the truck for trips where I tow. I have zero desire to deal with the annoyance and delay involved with waiting for a car to charge while I'm trying to get somewhere.

"Last year, 78% of all Model 3 orders were placed online, rather than in a store, and 82% of customers bought their Model 3 without ever having taken a test drive. Customers can now buy a Tesla in North America via their phone in about 1 minute, and that capability will soon be extended worldwide. We are also making it much easier to try out and return a Tesla without a test drive. You can now return a car within 7 days or 1,000 miles for a full refund. Customers are becoming increasingly comfortable making purchases online, and that is especially true for Tesla — which is a testament to the products we make."

It's an iphone on wheels. That's great for its customers and may be unavoidable for the rest of us in the future. For now, I'm happily living in the present - or past - depending on how you look at it. Charging EV's is a massive PITA. When that changes, I'll be all ears.

The new base model actually intrigues me more than the other variants because:
-The bare bones interior starts to make more sense at that price. One thing i'm unsure of is what replaces the wood (they just say "base" trim in the desription). I guess as long as its not gloss black plastic it should be fine.
-Fabric instead of fake leather seats sounds great.
-Manual seat and steering adjustment sounds quicker/easier to deal with than the convoluted screen/steering wheel setup for the power versions
-I'm not sure how much the reduced range really matters all the much. The big advantage of EVs is that you can start each day w/ a full charge if you want. For long trips it seems that best practice is to stop at every supercharger regardless of pack size-- I guess the difference here is that it might take longer given you'd be more likely to deal with tapering down of charging speed (although its possible the short range version is just a software limited in which case this won't be a problem).

The audio system sounds like it sucks though-- and I think the only sound source you get is their very basic bluetooth setup. But for a commuter car where you're just listening to podcasts its probably fine.

I do agree that if "lagginess" is programmed into the RWD variants it becomes a deal breaker. But could it really be worse than the average 4 cyl turbo with which it competes at this price point?

If I were in the market for this type of vehicle, it might hard to pass up the Hyundai Kona. Nicer interior, more practical and probably better sales/service support. Charging network is the big downside.

There's a Dead or Alive song about this statement...

People on TMC are cranky about the next wave of price drops. I loved this quote

if my memory serves me correct, I wouldn't say it is worse but similar. I did not drive a awd variant so it seemed fine to me at the time.

Yep. My guess is that Model 3 customers might be ok with it, but its harder to imagine someone spending 80k+ on a new Model S or X without a test drive (unless they're just trading in for a newer one).

They've already essentially done this w/ CPO cars- you can't test drive them. And I don't think you can return them either.

Given that they still have service centers, it wouldn't seem too hard to just allow people to book test drives in 1 of the loaner vehicles.

It always amazes me when people complain about depreciation of cars or tech. Should be added to the saying about death and taxes. Especially with tesla- they change their pricing atleast once a week it seems.

I'm not accepting the down sides of an EV if it merely matches the characteristics of a 4 cyl turbo.

And it's worse than that. Tesla has stated from the beginning that they are dedicated to improving efficiency and continuing to offer lower cost vehicles. Then when prices drop people are outraged.


How is it a "fuck you to your customers" to make your company more efficient, allowing you to produce better vehicles at lower prices?

They continue dropping prices across the whole range, and included more features in the $35k version than anyone expected. They are producing quality products that people love and they keep getting cheaper so more people can enjoy them.

Man, that's terrible for the customer.

On CNBC, they just brought up the question of "how quick does Elon return the "full refund"

As of 3:00PM eastern, the 940 million dollar bond payment has not been made

My office building is going through a horrible renovation that is moving thousands of people from individual offices into 36 and 72 sq ft cubes of open office space. The idiotic FAQs and guides that go out regularly include awesome tidbits like:

"Q: I've read that studies have proven open office spaces reduce morale; productivity; and work product quality, while causing increases to stress; disciplinary actions; and sick days. Why are we doing this?

"A: Most changes in life have both positive and negative impacts. We're choosing to only focus on the positive impacts of open office spaces like opportunities for increased communication and collaboration among your colleagues."

How is demanding $35k or more along with everything else buying a car entails for a test drive not saying "fuck you" to their customers? Especially when the driving experience of a Tesla is so completely unlike that of nearly every other car that's ever been made? I'll even give them the benefit of the doubt that the return process will be absolutely no sweat easy peasy two minutes from saying "I want to return this" to everything be done (which we all know the process will be nothing of the sort).

Whatever good things Tesla may be doing in the customer experience, no test drives and no place to look and touch is a fuck you. Nothing less. And please try to remember, or even acknowledge, that the current Tesla customer is still an inside-the-bubble-metro-area-SFH-living, technology-fluent rich dude that wants to be cool and hip among his peers (gender specific on purpose). It's nowhere near being a regular person.

I'd say, "Enjoy communicating and collaborating with your colleagues in your cube while drinking the Kool Aid!" but it looks like you've knocked it back quite a few already.

:lol:

FWIW, I only half believe the argument I was making. But I do think it has merit.

Allowing test drives increases the cost of the car. If 82%+ of people say "I'd prefer to save $X,XXX on my purchase price than have test drives available" then killing test drives is "screwing" a small minority. Ya cant' make everyone happy, eh?

This offends me less than BMW's approach of neutering the product to save a buck.

I guess it depends on how you use it, right? My assumption is that if ~90% of your driving is a commute of, say, <80 miles round trip and you can charge at home, it wouldn't be less convenient than a gas car. Or am I being foolishly naive about EVs? (Of course a used Nissan Leaf could do the same thing at a cheaper price, but I'm assuming the base Model 3 customer would otherwise be leasing something like a base spec 320i).

Allowing test drives adds thousands of dollars to a car? I don't believe it. Eliminate all expenses that don't directly return revenue because their finances are so precarious they have no other choice? I can believe that.

Tesla has shown some creativity in the past. Why not now? If the goal is to eliminate the financial burden on the company, there are ways to do it without saying fuck you to their customers.

Aside: maybe you're right. Maybe it's not a fuck you to their customers. You're their customer, not Joe Blow on the street. Maybe it's just a, "Fuck you, Joe Blow. Ima hang with my buddies that are buying what Ima selling and fuck you what you think!" Maybe it's just a fuck you to all the people that might possibly become their customers if they weren't such dicks. :dunno:

Put a trailer office in a broken up parking lot with a few cars, like Enterprise, and offer 30, 60, or 120 minute rentals for $50 or $200—which can be applied towards purchase. Whatever. Maybe save money and don't have a trailer or people, just cars, and just a few of them. Customers book their rentals online, get a code to unlock and the start the car at the appointed time. It still sucks compared to traditional test drives, but it solves their problem without.

Run a never ending stream of arrive and drive events, also a nominal charge that can also be applied towards purchase.

These ideas have drawbacks to conventional test drives, but have some advantages for both buyers and seller. Nominal fees, limited availability, and inconvenient times and locations weeds out many of the lookie loos and the ones that wind up not buying cover the cost of running the show. Maybe not perfect, but a hell of lot closer to perfect while also solving their problem of their own making than yelling, "fuck you!" in their *potential* customers' faces.

I expect that they'll backtrack on this no test drive thing in a few months-- as you point out there's plenty of less crappy ways to save money but still offer test drives. Seems like a lot of their troubles could've been avoided by just having regular franchise dealers. I know that's anathema but, to me, Tesla has become a case study in how great it is to have traditional dealers. Having to self-manage showrooms, servce centers and inventory across the whole world is a huge thing to try and take on. Now, if they eventually move to something like a month-to-month subscription model, then sure go nuts with doing everything online.

And, yeah, as a possible customer my impression of Tesla now is that they're dicks. The whole f'ed up customer hostile CPO buying process is what first made me arrive at that conclusion.

The whole f'ed up customer hostile experience start to finish, top to bottom is what first made me arrive at that conclusion.

http://forums.carmudgeons.com/showpo...9&postcount=71

Add a middle man who sucks profit and increases vehicle prices? Hell to the no.

Tesla shitcanning showrooms and service centers...
 

I think new car sales average some ridiculously low profit margin of around 1%. Either way you to pay for buildings, people, etc. From what I understand, dealers make their money on service and used car sales - which are both areas tesla seems to struggle with while charging high prices and offering low quality. I guess their solution is just to eliminate showrooms almost entirely - which is a loss from a customer perspective.

Tesla Service does a great job. I've never had anything but fantastic interactions with their service teams, both in AZ and in OH.

Tesla's new car sales model is mostly good. I love the no-haggle aspect -- the price is the price. Online orders make sense. They struggled with the Model 3 ramp-up -- but I'll give them credit for trying new things (like the "inside delivery specialist" that would coordinate delivery). Actual delivery was fantastic.

I haven't bought used from Tesla, but perhaps need to work on that from what you hear on the forums. But JST had a good experience -- and its entirely possible that we are only hearing the bad experiences from the online stories...

I don't think Tesla moving to a franchised dealer model will make the experience better overall.

I had a great experience, but it was also more than a couple of years ago. There have been a lot of changes since then.

I think Tesla will struggle without test drives, particularly since the test drives are what sell the car so quickly, but perhaps they are going to do something else with test drives?

The real issue for a lot of people is going to be what they do with used cars and trade ins.

I like what you did there, "[o]ffering low quality."

I think you're spot on with much of that. Regular dealerships don't make much directly on new cars, but they're what bring in the trade-ins which generate the shit ton of profit when sold as used cars. Without the new cars, the model starts to crumble a bit. The only thing stopping Tesla from making this work is themselves.

I don't know what Tesla does about trade-ins. Do they take them? If so, do they just wholesale them out and kiss all the money they could make goodbye? If they're not making the most of that, it would be another of their stupid choices, like eliminating standing stores and test drives. But whatevs

The franchise dealership model also makes a good bit of money on service, a fair amount coming from warranty work. Warranty work is profitable for dealers, but the manufacturer is the one paying. When the service center is owned by the manufacturer and the employees are paid by the manufacturer, it's not going to make any money from warranty work. The only revenue Tesla service centers will generate will come from non-warranty work.

That's got to be a driving force in their resistance to making it possible for independents to work on their cars. If only Tesla can perform Tesla service, they can charge higher rates, charge more for parts, and essentially, throw a bunch more $f$u$c$k$y$o$u$s at their customers.

I'll take your word for it given the large number of service encounters you've had with them ;)

I agree. But the current model seems headed downhill fast and it's picking up speed.

Front end also benefits some from financing on the folks who have average to less than average credit

In theory it sounds good but I think tesla is starting to run into some of the downsides of this pricing model. They are constantly changing pricing and option packages in order to keep up with the market. In reality, all car manufacturers do this but are able to do it with various targeted incentives. This helps avoid the problem of people buying a car and then getting upset when the MSRP drops the next week. It also allows for the reality of differences in price sensitivity between various markets. Personally, I’ve never found it to be a big deal to do a little research and email a few dealers with an offer. The ever changing Tesla lineup and pricing is more opaque and confusing.

Tesla shitcanning showrooms and service centers...
 

They do accept trade ins and many of them get resold by Tesla with a 2 or 4 year warranty. From what I understand they contract with third party services like Mannheim to process and store the cars until someone buys them. This is partly why they don’t allow you to see the car or test drive it before you buy it - it’s often not physically at a Tesla location. They no longer refurbish or even fix minor dings. A basic wash and maybe a vacuum is al you get.

Apparently they used to spend gobs of money refurbishing and detailing their CPO cars to like new condition. That got jettisoned in the name of cost savings. TD and JST benefited from that program.

But just as shutting down showrooms cuts costs but also potentially sales, they seem to have gone too far in the other direction and if they keep it up I imagine they’ll get less money for their used cars and less people will want to buy them.

What’s crazy is that CPO programs for most manufacturers is a cash cow for dealers and the companies themselves. It’s a proven model that works and I’m not sure why tesla can’t figure it out. You don’t need to go from complete restoration to nothing; there’s a happy medium. The one kind of cool thing is that the pricing for the used cars drops each day the car is on the market - it’s kind of a reverse auction.

But their struggles here also serve to highlight that no company can do everything - you have to pick what you’re good at and do that in house. Software is likely one of those things although, frankly, i think focusing so much development effort on self driving is a fools errand for a small compamy like tesla. Save some money by cutting that program instead of showrooms!

Tesla shitcanning showrooms and service centers...
 

I wonder how much of this is Elon thinking he “knows more than the generals” to use Trump language. I think the company is still a mess operationally and lacking strong oversight and accountability. They have lost several senior execs (chief counsel lasted 2 months, lost their CFO and chief accounting officer, ...) and also read a recent article that their new assembly line under a tent wasn’t permitted and has safety violations. Elon is also in trouble with SEC again because he can’t stop tweeting things that are inaccurate/misleading/inappropriately timed stock movers. He agreed to some board changes last time to appease SEC but I don’t think the board has any actual oversight function in reality to this day.


I get that people hate dealers. But the traditional distribution model has benefits that we’ve been talking about here.

1) A lot of buyers want to sit in the car and drive it. There are definitely the enthusiasts that will buy online just like everyone that has to have the new iPhone, but if they want to scale and sustain 500k+ sales per year then they need to win over mass market buyers who probably won’t be comfortable with the online only model. I’m really interested in seeing if this hurts sales growth over the next few years.

2) Logistics with trade ins. The entire process from appraising to taking them in to reselling them. But arguably they could partner with someone to help here.

3) the CPO sales process - the fact that they “do nothing” to the car before resale these days scare me if that’s actually true. I get that everyone always says a CPO inspection is nothing special, but the dealer is accountable for making sure a car is safe to be on the road. I don’t care about whether or not they pop out door dings but are they actually making sure the cars are roadworthy? (Brakes, tires, suspension components, etc)

4) I love the idea of them coming to me for minor service work in theory, but wonder how often it will work in reality. They still need a traditional service facility for circumstances where they can’t work on the car at customer’s location or if the car needs more substantial repairs. And if they are going to have local service shops scattered around the country, couldn’t they have a few models on display and someone there to answer some basic questions? Oh, wait... :)

Parts and service pay the bills at a traditional dealership. A good dealer will cover all of their operating costs each month from parts & service, with sales operation being gravy and really just generating future service customers. Tesla has the advantage of retaining the entire service operation. I really wonder what the true additional cost of a local sales operation is if they already have to run the service operations. Which gets me back to my first point - I wonder if Elon really gets it. Time will tell.

Regarding their used car resale process, apparently they do conduct a "70 point" inspection, but unlike everyone else they don't publish the inspection list and they won't share the results of said inspection. The whole genius behind CPO programs was realizing used car prices are lower than they otherwise would be due to a lack of trust and transparency. Tesla doesn't seem to get that they are shooting themselves in the foot with their opaque approach. They really should just outsource the whole operation to CarMax or something rather than needlessly damage their brand.

I suspect that their showroom costs are more than other dealers incur because they have put them in high cost retail locations instead of in typical car dealer on the outskirts of town. But, as you say, there's a happy medium here - why not use some floor space at your service centers to have a few cars on display, and maybe offer test drives in spare loaners. Maybe they will do that- it seems too obvious not to.

They have such a great brand and products that it's really a shame that they don't have someone who knows what he's doing in charge. They keep making unforced errors. Hopefully Musk will get tired of trying to run a car company and start something else or cede control to a "Tim Cook" type.