Tesla Pop-Up Stores Skirt Dealer Regulations

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Imagine an entire Tesla store that can fit on a flat bed trailer and be hauled anywhere in the country. That’s the idea behind Tesla pop up stores, the company’s newest sales tool. There are currently three pop up stores in Europe (in Denmark, France and Switzerland) and one in the United States. The US version appeared at Santa Barbara, California during the busy Memorial Day weekend and will move later to The Hamptons on Long Island for the summer season.

Tesla could very well expand its investment in these stores, Tesla spokeswoman Alexis Georgeson told The Motley Fool. The pop up stores require no long term lease the way space in a traditional retail mall does and it gives the company flexibility to take its mobile showroom to wherever potential customers are. To date, Tesla stores generate twice as many sales per square foot than Apple stores, which are considered some of the most profitable in the retail industry.

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During last year’s fourth quarter conference call, Elon Musk told analysts the company had “a secret weapon on the demand side that we’ll probably start to deploy later this year for demand generation,” adding that it could be a “good weapon against the dealers.” It now appears the mobile stores are that “secret weapon.”

“Designed in-house, the shipping container arrives and unfolds to double its size in just a few hours,” Tesla said in a media release. “The mobility and convenience of the design allows Tesla to bring our unique retail approach to customers in new locations where we do not yet have a brick-and-mortar location.” Once set up, the pop up stores are about 34 feet long and 20 feet deep. People visiting the stores will be able to “learn about electric driving with enticing visuals and interactive displays,” as well as to test-drive the Model S.

Customer education is an important part of Tesla’s sales process. In Tesla stores, customers can ask questions about the electric driving experience. By bringing mobile locations to popular destinations, the company can educate more people who are unfamiliar with the company’s fully electric vehicles than it can by limiting its stores to locations inside traditional malls.

The Tesla pop up store is another poke in the eye for traditional dealers and may help the company fulfill its promise to boost sales by 50% in 2015.

 

Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.