By on March 12, 2019

Tesla Model 3, Image: Tesla

If Tesla doesn’t exist anywhere on your shopping list, it’s easy to ignore the turmoil surrounding the automaker. If Tesla’s your employer, however, the past few weeks have been a roller coaster ride.

Retail employees, who, along with store managers and regional managers, learned of the automaker’s plan to divest itself of stores through media reports, claim they’re hanging by a thread, stripped of their commission and still in the dark.

Check out this deep dive in Jalopnik, which exposes the prevailing mood among Tesla retail employees. Having spoken to six employees scattered across the U.S., the publication reports that, in addition to rampant job hunting and varying commitment to chasing leads, remaining employees feel their store’s recent reprieve won’t be long-lived.

After announcing the closure of most of its retail locations amid a move to an online-only  sales model, Tesla dialed it back on Sunday. The 10 percent of stores that have already closed were on the chopping block anyway, the automaker said, and a further 20 percent are under review. However, by keeping about half of its stores open, the 6-percent price cut on all but the base $35k Model 3 turns into a 3-percent price hike.

In many cases, Tesla was reportedly unable to get out of its store lease.

One employee told the publication, “The stores, even the ones that are remaining open, are totally dead and without guidance. There was no care given to the employees here.”

Another said, “We don’t know what we should be doing.”

As mentioned before, the elimination of a sales commission knocked employees back to their base pay; in some cases, this represents a 50-percent pay cut. Many employees had reportedly taken advantage of a company discount program that allowed them to trade in accrued paid time off towards the purchase of a car.

As for the company’s claim that 78 percent of its sales took place online, four of the six employees call it “bullshit.” Even in states where franchise laws forbid direct sales from a manufacturer to customer, interacting with both an employee and the vehicle itself is seen by many employees as key to landing a sale, even if the customer makes the order on their phone while sitting in the retail store.

From Jalopnik:

For months, they had been directed to have customers buy cars themselves through the Tesla website, even if they’re sitting right next to them in the store. But many buyers place an order on their phones after talking with a salesperson for hours or even making multiple visits. Others come into the store, think about it, and then buy online later. In retrospect, multiple employees now suspect this directive as a scheme to orchestrate their own obsolescence.

Turmoil among its retail ranks may not rank high on CEO Elon Musk’s list of concerns, however. Besides a little trouble with the SEC, there’s another splashy unveiling in the works. The Model Y crossover makes its first appearance on March 14th. According to one report, the company still doesn’t know where it plans to build it.

[Image: Tesla]

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38 Comments on “Uncertainty Reigns at Tesla Retail Stores...”


  • avatar
    jatz

    Tesla Makes Headway in Entertainment Industry

  • avatar
    forward_look

    Who wants to pay $70,000 for a car you’ve never even sat in?

  • avatar
    thelaine

    It is so obvious that Tesla is doomed.

  • avatar
    Robbie

    A model of sitting in the car in a storefront, doing a test drive, and ordering online makes a lot of sense. I wish I could have bought my GTI like that. But Tesla now seems without direction.

  • avatar
    indi500fan

    To make inroads beyond the true believer EV fans to a wider, more traditional audience, they are going to need marketing and test rides.
    If they can’t afford that expense, they’re not going to be viable.

    • 0 avatar
      jatz

      “To make inroads beyond the true believer EV fans to a wider, more traditional audience”

      I’m part of that wider audience, all eyes and ears for something CUV-ish.

      Not just Tesla but neither is GM making much real-world marketing effort as no Bolt has ever been shipped to within 150 miles of me.

      • 0 avatar
        EGSE

        I was thinking about going to a Chevy dealer to check out the Bolt. It sounds like they got the engineering right. Then I spotted one while at a convenience store and struck up a conversation with the woman who was driving it. She opened the door and said “go ahead and check it out”. I looked and….saw a *downgrade* from a Chrysler Sebring interior. End of interest.

        • 0 avatar
          jatz

          “a *downgrade* from a Chrysler Sebring interior”

          No prob, I learned driving is a couple of metal-interiored old pickups and then had a succession of Beetles.

        • 0 avatar

          Drove a Bolt and liked it, but it’s clear GM paid for the battery with the interior…at 40K-ish I want some lux, which at OE is like….$50 per car ? At that price point, I’m OK with the small frame, but real seats and some lux, please.

          • 0 avatar
            jatz

            I can accept an interior from a ’50s pickup: honest, minimalist and you’re s’posta be lookin’ at the road anyway! *whack* *Ow!*

            (sorry, mem-o-reees)

            However I will not seek out and, if given one, I will not accept a “small frame” for any price.

            But since my earlier search result for the nearest Bolt of 170 miles away is today _671_ miles away, the issue is rendered moot.

            I wanna type that one more time cuz I love the word… moot.

        • 0 avatar
          Robbie

          @EGSE: You silly man… the woman thought you were interested in her, not her Bolt…

    • 0 avatar
      FreedMike

      Exactly, and as they get real competition, this is going to become even truer.

  • avatar
    EBFlex

    And yet there are still people that think Musk is a successful person and Tesla is a healthy company that makes quality products.

    Musk is a fraud

    • 0 avatar
      jatz

      Yeah, well, there are still people who wear MAGA hats and Obonobo t-shirts.

    • 0 avatar
      mcs

      @ebflex: You can debate the health of Tesla and whether they make a quality product, but there’s no question that Musk has been successful. He started an electronic payment company, has started an auto company that has produced over 350k cars, and started an aerospace company that is beating companies like Boeing and Lockheed – and several countries in satellite deliveries and manned space flight. I’m sure your accomplishments in life would dwarf his, but I still think he could be considered a success.

      • 0 avatar
        vehic1

        mcs: Good response, as are several others in this thread. Tesla has managed some real success so far, in spite of Musk’s shaky managerial skill set.

      • 0 avatar

        Good point although did not found Tesla at all. He did found a digital payment company but his wealth came from the ipo of PayPal which occurred after it acquired his company and after he was replaced as CEO. So he has never actually run a successful company.

        The pattern of behaviour seen at Tesla is actually well known and common for founder CEOs. Ask me how I know,

        https://en.m.wikipedia.org/wiki/Founder's_syndrome

    • 0 avatar
      FreedMike

      Fraud? Meh. I think the problem is that he’s got the “visionary genius” stuff down, but sucks at running things.

      • 0 avatar
        SlowMyke

        This is my view of it. Musk seems like a pretty brilliant dude when it comes to creating new things and pushing boundaries. And he’s generally a marketing genius. But FFS can someone teach him some common sense and tact? He’s his own (and lately, Tesla’s) worst enemy. If he could step back from his god-complex for just a moment, i think he’d realize he really needs help running such a(n aspirationally) massive corporation as a mainstream automaker.

        In any event, i don’t get the Musk is God/the devil battle that people fight online. I genuinely want to see Tesla succeed. It’s an American company that has had a shtload of American taxpayer dollars poured into it one way or another. Let’s not see that go to waste. Plus, Tesla has invigorated the industry as a whole, in terms of tech innovation. But all that said, what a clusterF it is right now.

        • 0 avatar
          SPPPP

          Musk has done some interesting things, but bring it back to reality here. If the criterion for genius is that you have a really neat idea, quite a few of us would be called geniuses. A lot of these great ideas are just not practical to implement, and that is why they remain ideas. Musk has been trying to bring these ideas into people’s everyday lives, and that’s admirable. But the gap between idea and reality has largely been bridged by burning investor cash. That is not a sustainable situation, and the long-term outlook for solvency is very murky. This has to be part of the conversation. If the apparent success lasts for only a few years and then crashes completely, was it still success? Where is the line between a successful venture and a successful con?

          This thought is not limited to Tesla, but I apply it to the Enron people, the Uber people, and everyone else who has a “new idea”.

          • 0 avatar
            SlowMyke

            I think you’re running into the “i don’t like Elon Musk” problem i mentioned. Musk being a genius in terms of creating/innovating/developing technology (or whatever you want to call it) has nothing to do with where the funding comes from. That is more of a function of his inability to properly run Tesla as a company, as i also mentioned. What Musk has done with Tesla has spurred the entire auto industry to take electric vehicles and autonomous technology much more seriously than they were before Musk and Tesla. Would everything have eventually changed anyway, probably, but Musk caused it to happen a lot quicker. The success or failure of a company has nothing to do with its leader’s intelligence in terms of creativity. It’s success has to deal with management ability, which can also be an area of genius ability. And again, we’re all in agreement here that Musk is definitely not a genius manager. Let’s not forget that Musk is also tied to several other high-tech and innovative ventures.

            Of the examples you’ve listed… Enron was considered one of the most innovative companies in America for a while. It was brought down by amccunting fraud and greed. Uber is definitely based on a clever concept, though i don’t know that it’s quite to the level of genius. It just applied crowd-sourcing and mobile comminations to public transportation. I don’t know enough about the timeline to say whether there were similar examples around when Uber started.

  • avatar
    jkross22

    From many accounts, Musk doesn’t do well with opposing viewpoints and criticism. The Tesla employees who knew this decision was wrong likely kept their heads down.

    When you lead by intimidation, foolish mistakes happen.

  • avatar

    Not only are employees unsettled, but many customers and potential customers are spooked by recent events.

    What is the price of the car, or software features?
    Answer: Check Elon’s Twitter feed to find out the latest breaking news/updates.

    Tesla are famous for not waiting for model year cycles to make changes to their product line or prices. We have grown accustomed to changes every few months. Now big changes happen every few weeks/days.

    Regular and frequent change is one thing, but (big) change with every tweet?

    Musk needs to dial back on changes and give time to evaluate if the change was good or bad before reversing direction.

    The good news is they are listening.
    The bad news is they are skittish.

    • 0 avatar
      SPPPP

      The aspirational branch of the Tesla cult seems to be taking the price changes quite hard. Musk said the prices on Autopilot will rise and revert to “normal” on next Monday, the 18th of March. I ventured into an Electrek post where a number of people blamed current Autopilot “owners” for the price raise, because they complained about the discount after they had already paid. Furthermore, they said these complainers are to blame for all the traffic deaths that “would have been prevented” because now Autopilot is $2000 more expensive and some people just can’t afford it now! Meanwhile, people are paying $2000 for a “full self-driving” capability that doesn’t yet exist(!), so they don’t have to pay full price later. I can’t even make sense of this mindset – it’s ludicrous to me!
      https://electrek.co/2019/03/12/tesla-autopilot-prices-back-to-normal-elon-musk/

  • avatar
    ToddAtlasF1

    A problem I have with Elon Musk is that he can take a reasonable idea that is worthy of exploration and present it through his prism of self-aggrandizement in such a way that it sounds like a pyramid scheme fueled by sniffing snake oil.

  • avatar
    SlowMyke

    Hey mods, just curious about the criteria for moderation around here. I’m pretty sure I’m one of the more tame commenters around here, yet i find myself in moderation purgatory quite frequently. Kinda kills discussion.

  • avatar
    Richard Chen

    My brother’s recent Tesla Model 3 buyer’s experience:

    Feb 28: car ordered, mid-range (264mi), blue/white +$2500

    Tesla has a car in stock with the upgraded wheels for $1500, thrown in for free. Uh, Tesla just might have a cash flow problem…

    Mar 8: car delivered

    Mar 11: lucky you, got the car already with the not awful wheels and ducked the 3% price hike

    • 0 avatar
      SCE to AUX

      Dang, that’s the configuration I’d like.

      But I don’t care for the busy center screen or the door handles. And, oddly, I had trouble with egress due to the steering wheel and brake pedal locations.

      At least I didn’t pay extra for the beautiful blue paint on my Ioniq EV.

      • 0 avatar
        Richard Chen

        Paying for color options? yeah, right. He’s younger so hopefully the lack of ergonomics won’t get to him. I get annoyed when the turn/wiper stalks aren’t in the exact location as all the other cars I’ve had as long term drivers – drove a BMW Z3 and kept missing the turn stalks.

        He’s offered me a spin, but he’s an hour and a half drive away.

  • avatar
    cognoscenti

    I need to go drive a Model 3 before my local dealership dries up and blows away.


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