Foregoing traditional dealerships, car salesmen and even an advertising budget, Tesla Motors is opening stores in high-traffic areas to get the word out on the just-launched Model S, its first mass market electric car.
On June 29, its twelfth North America store opened on Santa Monica's Third Street Promenade, a pedestrian-only tourist area near the beach. The location sits between an Adidas and Club Monaco and is down a block from an Apple store.
Ironically, this unusual retail approach is seen as working for the launch because Tesla has few cars to sell immediately. Deliveries of the Model S, a luxury electric plug-in sedan, began in June and about 10,000 Model S reservations already awaiting delivery. Someone ordering a car from the Santa Monica store wouldn't expect to see it until May 2013.
Car showrooms are seen as the best way to educate people about how electric cars work, including costs and benefits, before they're ready to buy.
"We get to engage with them while they're not thinking about buying a car, which is much, much better and much less pressure-oriented for them," George Blankenship, Tesla's vice president of sales, told Investor's Business Daily. "There's a different dynamic when you walk into a car dealer."
The Santa Monica store has only one operational Model S for show, the skeleton of a Model S platform, and a design prototype of the Model X crossover SUV, which is set to launch in 2013.
Mr. Blankenship, who was hired two years ago, is best known for helping guide the opening of Apple's first 150 stores and has likened Tesla's retail model to Apple's.
"You'll never see a 'don't touch' sign in a Tesla store," Mr. Blankenship told Forbes. "We want everyone — from kindergartners to grandparents — to come in and see for themselves why driving electric is the future."
Production at its Fremont, CA factory is planning to ramp up to 80 cars a day from only one a day currently to reach its goal of making 5,000 cars this year and 20,000 in 2013. Matching those plans, ten stores will open this year with 25 to 30 more set for 2013.
Observers said that, although Tesla controls the customer experience and pricing with its showroom model, it could eventually switch to the traditional franchising model to avoid the costs of retail and invest more aggressively in design and production.
- Tesla Motors Delivers World's First Premium Electric Sedan To Customers - Tesla Motors
- Tesla Stores In Store, As Stock Falls In Model S Week - Investor's Business Daily
- Tesla opening stores in places car buyers wouldn't think to shop - Chicago Tribune
- Tesla Ties Car Sales Goals to Apple-Style Store Strategy - Bloomberg News
- Disney, Microsoft, and Tesla Copy The Apple Store. So Should You. - Forbes