It’s hard to keep up with the endless tweaks and about-faces made to Tesla’s short-term sales and pricing strategies. Some automakers roll out changes and stick to them for years; Tesla pulls over and adjusts its near-term operations from a rest stop off the side of the interstate.
The latest change to Tesla’s game plan involves a reversal of a strategy announced just a couple of weeks ago. The lion’s share of Tesla’s stores will not close, after all. And, instead of prices dropping across the board to reflect the cost savings, the automaker will raise them instead.
Sales will still be online-only, however.
The U-turn comes after another such direction change — this one in Tesla’s financial standing. After two profitable quarters in the second half of 2018, the automaker predicted nothing but profits going forward. Not so fast, CEO Elon Musk said recently.
It was reported last week that Tesla’s store closures have already led to an 8-percent drop in employee headcount, with some staffers claiming they first found out about their perilous job status from news reports, not the company that employed them. Some can breathe easier now.
“Over the past two weeks we have been closely evaluating every single Tesla retail location, and we have decided to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months,” the automaker said in a Sunday blog post.
Tesla claims the stores — 10 percent of total locations — which have already closed were always going to close. Blame low foot traffic, the automaker said. Now, certain stores in high-profile locations have reopened with a smaller “crew,” while another 20 percent are under review.
Of that crop, “depending on their effectiveness over the next few months, some will be closed and some will remain open,” Tesla claims.
While the storefront cull was expected to yield an average price reduction of 6 percent on Tesla vehicles (minus the just-unveiled $35,000 Model 3 variant), the retention of roughly half of Tesla’s stores means pricing will need to reflect the added cost. The company said customers have until March 18th to order a car at that earlier, revised pricing. (Again, the Standard Range Model 3’s price remains fixed.)
Because it’s following through on only half of the anticipated store closings, Tesla claims the price drop will be half of what customers were told to expect. Thus, prices are rising 3 percent from that short-lived trough.
Another recent promise is still alive — at least for now. The 1,000-mile, seven-day return policy remains in place, Tesla claims.
[Image: Tesla]
Elon needs to go back on his meds. Wait, maybe this is because he’s already on them!
This is what “move fast and break things” looks like from the outside.
Tesla is mature enough that they need to give away from the startup mentality and embrace deep analysis of big decisions before committing to a course of action.
As Mike Tyson once said, everyone has a plan — until they get punched in the face.
+1
No plan survives first contact with the enemy.
With reality.
Oof.
Clearly Elon Musk reads TTAC and responded nimbly to feedback on the plan, softened the plan, and STILL no one is happy? Lol.
Haha, maybe he can switch to not only skipping marketing thanks to online media taking care of the marketing for him: he could also cut out all Tesla’s management activities and have an AI bot scan the internet forums and implement automated management commands based on that.
Better to follow through on tough decisions than to submit to the whimsies of public opinion. Doing the latter makes it look like the public knows more about running your business than you do.
Maybe Musk is using the shotgun approach, or whatever I should call it. It’s questionable to just make _a_ decision and then see how people react, and if they don’t react well then just change that decision…
@sporty: Agreed.
But sometimes it looks equally stupid to double down on a bad decision. And this is why they should have thought this through better to begin with.
“Over the past two weeks we have been closely evaluating every single Tesla retail location”
They should have done this 4 weeks ago, instead of adding to their normal drama.
According to another site, this was because they can’t escape their leases on a bunch of these stores and were about to get sued.
Missing something this obvious is a sign that maybe your CEO shouldn’t be trying to run 3 companies at once?
Delegate! Delegate! Delegate!
// Dalek voice
Yeah, I’m not sure why they thought they could just walk away from those leases and not be on the hook for the rest of the term. I do expect Tesla to go into the real estate business, ie start looking for companies to take over the leases.
*cough* Due diligence *cough*
Or having to pay a whole bunch of dollars (on the order of 1.5 B) to get out of those leases.
Tesla is testing the theory that there is no such thing as bad press.
They continue to make it look like it’s amateur hour.
Wouldn’t be surprised if their next move is to put Elizabeth Holmes on their board to help look at ways to reduce healthcare costs.
I’ll see your Elizabeth Holmes and raise you a Katie Holmes. She’s been around powerful men and cults before, so she’ll know how to keep Elon grounded.
Tesla thrives on chaos. It there were no controversy Musk would create one. Despite all the turmoil the company can still produce cars.
“Tesla thrives on chaos.”
You gotta keep your true believers mobilized.
They’re the skinny-jeans counterparts of Trumpists who claim his every abandonment of nationalist principles is just a 4D chess move we can’t comprehend.
I’m a Tesla fanboy.
Musk is interesting and sometimes insightful, but I really just want the [email protected] car.
Tesla’s prices have been declining and my household income is expected to increase — and I get the car when those lines meet.
Musk is [email protected]!t crazy — but in a very specific way that’s useful, and he’s usually smart enough to stack the deck when he takes big risks. But I have little doubt that his last days will resemble those of Howard Hughes — but there’s a nonzero chance they’ll pull him kicking and screaming from a penthouse on Mars instead of from a penthouse in Vegas. Sometimes crazy gets $#!t done, sometime crazy is just crazy. I’m glad he’s around, but I’m also glad I don’t work for him.
Now, it’s time to go play on the Tesla configurator and run some financial calculations again, to see if it’s time to push the “deliver my car” button.
Thank you; that’s exactly what I meant.
@Luke42: Still too much crazy for me.
At the end of the day, I want to forget about the mfr of my car, without constant reminders of them (much less their CEO). I can’t name the CEO of Hyundai, their EV in my garage has no quality issues, and I believe the local dealer will be around for a long time (even though I have no plans to visit them).
Tesla is past the start-up phase; they need to act like it. Appoint a competent COO and have the staff report to him/her.
Musk should be a shareholder-without-portfolio. At this stage of their evolution his volatility works against the company’s best interests. Lock him in a soundproof glass room. A nice shiny object, look but don’t touch. Where is B.F. Skinner when we need him?
Regarding the photo: Is that a car attached to the back of that iMac?
Hello, Customer Service?
Some jacka$$ stuck a car on the back of my iPad. Do you know how I can remove it?
Touchscreens in cars will never be a thing – I’m sure of it.
It amazes me that there are people still so stupid as to think this is what a normal healthy company does
forget about company – look at the car. Damn iPad on wheels.
Oh the products themselves are awful as well. The above iPad on wheels is even worse than the new Explorer.
But I’m guessing even the Explorers bumpers will stay attached in the rain
I’ve seen many cars with assembly quality issues – Accord, JGC, RDX (to name most memorable). But with Tesla (put Volvo here too) I principally disagree that car functionality is hidden in the menus of iPad. For me, this is a non-starter.
Hope they hang in there, but this looks like:
Cheech and Elon – Still Smokin’
Tesla needs someone who can think in more than 140 characters at a time and has attended impulse control training.
Musk is such a visionary. He’s taking corporate management to a new era: such quick strategy turns that it can only be achieved with today’s digital media, the old newspaper media would be too slow to keep up with his ‘management genius’ printing yesterday’s completely opposite old strategy…
Verbal diarrhea.
Musk is a fraud and a dolt.
This is what the phrase “death throes” means.
#1 of Deming’s 14 points
Constancy of purpose
We should really talk more about Deming. People tend to lump Toyota/Honda/etc together, but really there is Toyota, and everyone else. And the difference for Toyota, when there was a difference, was Deming (statistical process control, variation reduction).
(OK OK I also like him because he wanted to “…eliminate the annual rating or merit system” – point 12)
My family recently acquired its first real live Toyota (2010 model) after I quit working for the other guys. I love the reliability (but I absolutely despise the old-style oil filter design).
“(Again, the Standard Range Model 3’s price remains fixed.)”
Until Musk changes his mind 5 minutes later.