On the reference of the last week announcement about closing maximum stores and shift of the electric-car, Elon Musk (CEO, Tesla Inc.) caught many employees in surprise that the business would carry forward to online-only sales. The key player named Sanjay Shah, implemented the online sales strategy, who has taken on additional responsibilities since his arrival from Amazon.com Inc last summer. It has been also revealed that he was incorporated with Tesla as senior vice president of energy operations and continues to oversee the same business.
Sources are considering this an abrupt move in the market by Musk, as it shocked some investors including Alex Chalekian, the founder and CEO of Lake Avenue Fianancial in Pasadena, California.
“This was a total 180-degree turn," Chalekian, who owns a black Tesla Model S, said in a phone interview on Monday. “Tesla had been talking about expanding stores, and all of a sudden they are closing them. To me, this signals a huge financial concern and a possible cash-flow issue for Tesla."
Tesla also suggested a brick-and-mortar retail strategy was important in its annual report filed on 19 February, just nine days before Musk announced the pivot to online sales.
“Our Tesla stores and galleries are highly visible, premium outlets in major metropolitan markets, some of which combine retail sales and service," Tesla said in its 10-K filing. “Opening a service center in a new geographic area can increase demand. As a result, we have complemented our store strategy with sales facilities and personnel in service centers to more rapidly expand our retail footprint."
Tesla has already closed several stores, including one at the International Market Place in Honolulu and another at the Gardens on El Paseo near Palm Springs, California. Calls to those stores now ring through to Tesla call centers in Las Vegas and Fremont, California.