Electric vehicle giant Tesla, Inc. TSLA, which reported stellar quarterly results earlier this week, is reportedly looking to right-size its retail operations.
What Happened: Tesla is planning to close some retail stores, especially high-rent locations in malls and shopping districts, the Electrek reported, citing sources familiar with the matter.
The company, however, is not seeking to trim its retail workforce, and instead it will opt to have most of the staff working remotely with people placing orders online, the report said.
Tesla advisors assisting customers who have placed orders online will work out of a central location and walk them through the process leading up to delivery.
Tesla will not cut down on its brick-and-mortar stores but will rent spaces in mall parking lots, warehouses and other locations to manage test drive fleets and deliveries, Electrek said.
Related Link: Tesla's FSD Could Alone Be Worth Much More Than The EV Giant's Current Market Cap In a Decade: Analyst
Tesla may retain the charging stations it has installed in the parking lots of the malls even as it moves its retail stores out of these malls, the report said.
Why It's Important: In 2018, Tesla decided in favor of locating its retail outlets to take advantage of the heavy foot traffic in high-end malls.
The cost savings from the changed retail strategy will likely help the company open more delivery centers in less expensive locations, bringing them closer to its customers. These delivery centers could double up as service centers, the report said.
Tesla shares were up 0.46% at $647.76 at last check Wednesday.
Related Link: Tesla Analyst Cuts Price Target By 17% On Potential Battery Delay
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