Tesla fought for years in courts and the Utah Legislature to finally win the legal right to open a manufacturer-owned dealership in the state last year. Now the company no longer needs it, and is moving exclusively to online sales globally.
The company announced the change in a blog on Thursday.
Tesla had no comment about how many sales jobs that may affect at its South Salt Lake City showroom. But spokeswoman Gina Antonini said "this will be a several-month transition.”
She noted that Tesla will “keep a number of stores and transition them to galleries or information centers so people can still learn about our products and see them firsthand.” But she did not say whether the South Salt Lake dealership will be among them.
Also, she noted that the company “will be increasing our investment in the Tesla service system” but did not say how that will affect the service center at its Utah dealership.
The company blog said that “shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6 percent on average.”
That includes now offering the Tesla Model 3 for $35,000. That electric car has a top speed of 130 mph and has a range of 220 miles.
(David Zalubowski, AP file photo) In this July 6, 2018, file photo, prospective customers confer with sales associates as a Model 3 sits on display in a Tesla showroom in the Cherry Creek Mall in Denver. Tesla is suffering one of its worst sell-offs of the year after announcing it would begin closing all of its stores in favor of selling its electric cars exclusively online. The goal is to allow Tesla to lower the price of its Model 3, the vehicle that CEO Elon Musk envisions as the company’s first mass-market vehicle.
“Over the next few months, we will be winding down many of our stores, with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centers,” the company said. It adds that anyone in any state can quickly buy a Tesla online.
“At the same time, we will be increasing our investment in the Tesla service system, with the goal of same-day, if not same-hour service, and with most service done by us coming to you, rather than you coming to us,” the company said. “We guarantee service availability anywhere in any country in which we operate.”
After years of battles, the Legislature last year finally passed a bill to allow Tesla to operate a dealership. Utah’s Motor Vehicle Franchise Act had banned manufacturers to have direct ownership interests in any new car dealerships.
Tesla opened its first Utah dealership in 2015 but had to quickly downgrade its store to a service center after the Utah Attorney General’s Office ruled that the dealership violated the law.
The company attempted to work around the law and sell vehicles through a subsidiary known as Tesla UT, but it also was found to be in violation. The company appealed its case to the Utah Supreme Court, but lost.
Bills in the Legislature sought to give Tesla and other potential manufacturer-direct operations permission for dealerships, and one finally passed last year.
Its sponsor, Rep. Kim Coleman, R-West Jordan, argued it was a free-market move that would create more jobs — many of which now may disappear.
