Tesla is making big moves to get ready for its first mass market car, the Model 3.
In addition to ramping up construction at its giant Gigafactory, honing in its manufacturing practices, and buying SolarCity so that the company can provide the energy needed to power the Model 3, the electric car maker is now rethinking the design of its showrooms.
“We’re throwing preconceived notions of auto sales out the window and starting from the ground up,” Ganesh Srivats, Tesla’s Vice Presiden of North American sales, told Fast Company in a recent interview. The car is set to be released in late 2017.
Unlike other car companies, Tesla doesn’t sell its cars via dealership networks. Rather, it uses a direct-to-consumer sales approach, selling its vehicles both online and at its own retail locations.
Because direct sales are banned in a few states, including Texas and Arizona, Tesla is forced to also set up galleries instead of stores to showcase its products. At these galleries, interested buyers can talk to product specialists and can take cars on test drives, but no sales are allowed.
Tesla CEO Elon Musk said during an analyst call in June that the company would also integrate SolarCity’s offerings, like solar panels, into its stores.
“Looking ahead, particularly to next year, selling Model 3, something on the order of a $35,000 car, if we’re selling Powerwalls and solar systems of comparable value and doing so in the same sales footprint with the same person, of course this is an approximation, but our cost of sales should drop in half,” Musk said. “You’re basically selling almost twice as much in a single transaction as you otherwise would.”
Basically, Musk is betting that the Model 3 will ramp up foot traffic in its stores, thus creating the perfect opportunity to also sell people other Tesla products.
It’s a good plan, but only time will tell if it actually works.
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