We were baffled, if not surprised, when we reported earlier today that Tesla had again changed its business model for the third time in two weeks when it decided to keep some of its retail stores open. It turns out we weren't the only ones confused by the fact that the company seems to be making up its business model on the fly: here is Bloomberg summarizing the similarly perplexed hot takes by other Wall Street analysts.
Arndt Ellinghorst at Evercore called the moves "amateur hour":
“We do not think we will raise too many eyebrows with the opinion that this looks like amateur hour. Tesla clearly is in need of a stronger middle management layer critical in running a $50 billion auto company.” “There should be no argument that this was a better topic for internal-discussion before what clearly has been and will be two months of pure price confusion for the consumer.” “To backtrack from the online only strategy to us is a sign that may indicate Tesla did not see a positive reaction to orders post the announcement.” “Going forward, Tesla does have another (short-term) marketing tool to close the quarter: order now before the March 18th price increases.” “We have to wonder how engaged and motivated Tesla retail employees will be in the short run after being blind-sighted by the move and even now still potentially being held in limbo.” “The seemingly spontaneous yet dramatically altering strategic decisions (for a $50 billion market cap company) doesn’t lend a lot of confidence, in our view. Rather, it makes it seem like Tesla is making decisions on the fly and reacting to very short-term factors.” Jed Dorsheimer at Canaccord: “While the reversal to keep stores open does call into question the soundness of the initial decision, we view this as the right course of action and think that test drives are still an important part of the sales process until the electric vehicle penetration rates increase meaningfully.” Careening from one "business model" to another, on Monday Tesla abruptly decided to keep "keep significantly more stores open than previously announced", according to a blog posted on the company's website. "Last month, we announced that we would be winding down many of our stores and moving to online-only sales in order to pass the savings along to our customers," the blog noted, ignoring the fact that last month was 12 days ago. "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 piece continues. Tesla says that it wound up closing 10% of its sales locations and that these locations were stores that "didn't invite the natural foot traffic our stores have always been designed for". It then goes on to say that they were stores that "would have closed anyway". Tesla says an additional 20% of stores remain under review for potential action.
195total visits,1visits today