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Tesla pulls the plug on showrooms

Palo Alto-based automaker to focus on online sales

Those looking to test drive a brand new Tesla may have to buy the car first. The Palo Alto-based electric automaker announced on Thursday that it plans to shut down its showrooms and shift sales to online only as part of the company's strategy to cut costs so it can offer its newly launched mid-range Model 3 version for $35,000.

Tesla currently has 378 showrooms worldwide, including two in Palo Alto, where potential buyers can test drive the company's electric cars or at least get an up-close look at new models. After the showrooms close, potential car owners will most likely have to purchase a vehicle online before they can take one for a drive, according to the company's website.

"A test drive prior to purchase isn't needed. You can now return a car within 7 days or 1,000 miles for a full refund. Quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free," according to the announcement on the company's website.

The company will be winding down many of its showrooms over the next few months, with a small number of those in high-traffic locations remaining as galleries, showcases and Tesla information centers, according to the company's website.

A company spokeswoman could not comment on whether the Palo Alto showrooms at Stanford Shopping Center and on El Camino Real, near West Charleston Road, are among those that will remain open or how many employees will be impacted.

According to California's Employment Development Department, the company filed a notice in January that it would be making 78 permanent layoffs in Palo Alto before the end of this month. The company spokeswoman told the Weekly that those staff reductions are not related to the closing of its showrooms. The company announced the layoffs in January, she said, as part of its goal to shrink its full-time employee head count by 7 percent globally. With the cost savings, the company plans to focus on increasing production of its mid-range Model 3.

The Stanford showroom, in particular, has provided local Tesla car owners, as well as the curious, a sneak peek at the company's electric cars. It was here where Tesla officially unveiled its Model 3 for the first time in January 2018, attracting a crowd outside its doors waiting to get a hands-on look at the sedan. Many, like Stanford University employee Jean Nguyen, had been waiting for months for the opportunity to check out the Model 3 in person since putting down deposits on the car nearly two years earlier when the company began taking reservations. After the January 2018 unveiling, Tesla planned to bring Model 3 display and test-drive vehicles to showrooms across the country.

The release of the Telsa Model 3 mid-range version has been long anticipated. The company started limited production of the Model 3 in 2017, but only made high-end versions of the vehicle with an average asking price of $55,000 when the first batch rolled off the production line. On Thursday, the company announced that the Tesla Model 3 is now available starting at $35,000.

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