VIDEO: Tesla to Shift to Online Sales, Will Warwick Store Be Impacted?
Saturday, March 02, 2019
GoLocalProv Business Team
As a result of the shift to online sales, Tesla says it will be “winding down many of our stores.” The company says a small number will stay open in “high-traffic locations” to serve as “galleries, showcases and Tesla information centers.”
The Warwick, RI location on Quaker Lane -- an old Hyduai dealership -- may be impacted. The location is yet to open after being announced nearly a year ago.GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST
Joe Shekarchi, who is the attorney for Tesla in Rhode Island and handling the permitting of the new Tesla store in Warwick, tells GoLocal that is unaware of any change in plans. "Last week we were pulling permits for the location," said Shekarchi, who is also the House Majority Leader.
Elon Musk says the shift to online exclusivity is intended to reduce the price of all Tesla cars by 6%. Model 3 cars will now be sold for $7,900 lower than their previous starting price of $42,900.
In January, Tesla announced plans to cut its full-time workforce by 7%, according to the Financial Times.
The exact number of employees that will be laid off has not been revealed, however, it is expected to be in the thousands.
"Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months," said Musk in an email to employees.
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Tesla victorious in Rhode Island after state approves license to sell direct
Tesla scored a major victory on Wednesday after the California-based electric car maker was given the green light to sell its vehicles to consumers within the state. Lawyers from the state Division of Motor Vehicles concluded that state law barring auto manufacturers from selling directly to consumers was only applicable to franchise auto dealers and not Tesla, who operates independently through company-owned stores.
With its business license finally approved, Tesla is planning on opening its first showroom in Rhode Island on Route 2 in Warwick. Tesla will be selling its fleet of premium electric vehicles at 870 Quaker Lane, which is the site of a former Hyundai dealership. While the majority of details about Tesla’s first store within the state remain unknown, expectations are high that the Silicon Valley-based electric car maker would formally start selling its cars within a few months.
Ironically, state law that originally barred Tesla from establishing a sales presence in Rhode Island has become a pain point for Ford and Toyota, automakers that have previously tried to file for similar licenses to sell direct to consumers, but failed because of their use of franchised dealerships.
Unlike the ongoing saga taking place in Michigan, Rhode Island has adopted a far friendlier stance to the increasing influence of Tesla in the auto industry. Last summer, R.I. Gov. Gina Raimondo met with Tesla CEO and co-founder Elon Musk at the National Governor’s Association meeting in Providence. After their conversation, the Rhode Island governor openly expressed her support for Tesla’s and its future ventures in the state.
“I would like Tesla to be able to sell here. Right now, I see Teslas driving around in Rhode Island, and they are purchased in Massachusetts. It would be a great thing if they could be purchased in Rhode Island, so we get the sales-tax revenue, and for our customers,” she said, according to a report from the Providence Journal.
As Tesla continues its push towards further expansion into the United States, “anti-Tesla” states such as Michigan seem to be fighting a losing battle against the Musk-led electric car maker and energy company. Just recently, Tesla opened job postings for a service role in Michigan, despite the presence of an ongoing lawsuit between Tesla and the state.Tesla victorious in Rhode Island after state approves license to sell direct
Tesla confirmed this week that it has received approval to expand in Rhode Island. After some confusion over the legality of the automaker’s sales model in the state, the company officially received approval by the DMV.
Like it is the case in a few states still, Tesla’s direct sale business model can sometimes be blocked by old laws prohibiting automakers from operating car dealerships.
There was some confusion over it being the case in Rhode Island too.
Gov. Gina Raimondo brought it up at the National Governors Association last year when Tesla CEO Elon Musk gave a talk at the conference.
At the time, the company had been trying to enter the neighboring state of Connecticut, but it failed to change the law after receiving strong opposition from the dealerships. Gov. Raimondo wanted Tesla to come to Rhode Island, but she feared a similar situation:
“I would like Tesla to be able to sell here. Right now I see Teslas driving around in Rhode Island, they’re being purchased in Massachusetts. It would be a great thing if they could be purchased in Rhode Island so we get the sales tax revenue, frankly, and also for our customers.”
As it turns out, Rhode Island’s law was more relaxed than Connecticut’s on the subject and allowed for Tesla to operate a dealership.
WPRI reported this week:
“A spokesman for the DMV tells Eyewitness News the state law roadblock wouldn’t have stopped Tesla. State law only prohibits car manufacturers who currently sell through Rhode Island dealerships to begin new direct-to-consumer sales in the state, but because no local dealerships currently sell Teslas, the law doesn’t apply.”
The first store in the state is reportedly set to open in Warwick during the first quarter.
That’s refreshing. That law actually makes sense. It’s how those other direct sale laws prohibiting Tesla to operate should have been written. The original purpose of those laws was to block existing automakers to compete with their own franchise dealerships and not to block new companies that never had any dealerships to compete with other companies’ dealerships.
Rhode Island got it right here and it could put even more pressure on neighboring Connecticut.
Tesla buyers in Connecticut have been going to New York and Massachusetts to buy their vehicles. Now they will also be able to go to Warwick if it makes more sense for them.
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Tesla opens first Rhode Island store
Rhode Island's first Tesla store is opening its doors on Saturday, according to a press release issued by Warwick Mayor Joseph J. Solomon's office. While the auto manufacturer's plans to open a showroom in Rhode Island have suffered some ups-and-downs, it seems they've finally come to fruition.
Solomon plans to be on hand tomorrow at 10 a.m. at 399 Bald Hill Road to "celebrate the grand opening of the international company's first Rhode Island location."
In previous reporting, The Providence Journal has noted, there were legal questions about whether the electric car manufacturer's business model of selling cars directly to consumers, instead of through dealerships, was legal here. State attorneys later decided it was.
“Tesla likes the business climate in Rhode Island and specifically likes the business climate in Warwick,” said K. Joe Shekarchi, the House majority leader who in his legal practice has represented Tesla on issues in Rhode Island.
An earlier version of this story had the new store misidentified.
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