Reporting by Melissa Burden, Urvaksh Karkaria, David Muller, Hannah Lutz, Pete Bigelow and Jackie Charniga
Editor’s note: Tesla on March 10 said it would close fewer stores than originally planned. Tesla’s release was issued after the March 11 print edition of Automotive News, which carried this story, went to press.
When most companies say they're closing brick-and-mortar shops and focusing efforts online, the decision is seen as a natural byproduct of the Internet age. But when Tesla does it — and does it abruptly — it sends ripples through an industry still struggling to define the disruptive electric-car maker.
Some consider Tesla's pivot, announced Feb. 28, as a sign that its direct-to-consumer model has failed. Others see it as a natural evolution for a company unafraid to do things differently. Still others point to the EV maker's financial struggles.
The unexpected nature of the move — Tesla had announced a retail expansion late last year — further fuels speculation that the company, under CEO Elon Musk, is at best impulsive and at worst still facing the specter of failure that loomed last year as it ramped up Model 3 production.
Either way, Tesla's decisions have consequences for consumers, franchised dealers and other automakers. Dealer groups are raising new legal questions about Tesla's sales model, while traditional automakers might wonder whether they can follow in Tesla's footsteps.