In February, Elon Musk stated that the company would shut down the Retail Store chain business of Tesla Motors. But after ten days, Elon Musk took a U-Turn and said that they would shut down only half of the existing retail store chains of the Tesla Motors. But nearly after four months, there are no signs of shutting down the brick-and-mortar stores of Tesla. Elon Musk took a 360-degree turn on his decision twice, and we don’t know why he did that.
As a part of cost-cutting measures for Tesla, Musk announced the shutting down of the brick-and-mortar stores. But after tweaking the efforts, the company announced only half of the stores would close. But later, the company did not close the stores but increase the number of service centers across the country to improve the service reach. The erratic decisions of the company and making U-Turns on every decision are tough for the investors to understand. David Neuhauser, a managing director of Livermore Partners, said that the company would find it challenging to manage the profitability aspect of the Business. David Neuhauser invested against Tesla in the markets, as he sees the company struggling with the business in the near future.
In a recent Earnings Call with Analysts, Elon Musk said that the retail stores are essential for the business. He specifically called Retail Stores as the viral seeds, which will help the company grow the business in high-traffic areas. After someone asked Mr. Musk about the future plans about the retail stores of Tesla, he downplayed the importance of the brick-and-mortar stores. According to him, the only reason Tesla stores are running is that they have the Free Charging stations, attractive financing offers, and most importantly, the servicing station for all of the vehicles.