Tesla Motors Inc. (TSLA): 180 Degree Turn From ELon Musk


If Tesla Motors Inc. (NASDAQ:TSLA)’s CEO, Elon Musk, recent sentiments are anything to go by, then the giant electric company may soon change the way it sells its vehicles to customers. Tesla is currently entangled in a heated debate with franchise dealers in a number of states, on how the company plans to sell its vehicles. Musk has already hinted that the company may spice its sales with a mixture of direct sales and franchising deals.

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During an interview on Autoline Daily with John McElroy, Musk emphasized that the electric company may resort to using a hybrid system that is made of its own stores and dealer franchises for selling vehicles. The remarks are in contrast to what the company’s Legislative Director, Jim Chen, told stakeholders a year ago. Tesla Motors Inc. (NASDAQ:TSLA) has over the years sold its vehicles in stores while also taking orders on its online platform.

Chen stated that Tesla Motors Inc. (NASDAQ:TSLA) will continue selling its vehicles directly to consumers until it reaches a certain minimum threshold where it would expand further. The sentiments echoed by Musk essentially show that Tesla Motors Inc. (NASDAQ:TSLA) cannot grow the whole business on its own, in terms of sales in the years. The unveiling of Model-X, as well as Model 3, is expected to result in increased orders something that might be a bit hard for Tesla to handle, in terms of dealing with individual customers.

Partnering with other dealers to cover more markets will have to come into play especially with the release of the much awaited Model X and Model 3. The contentious issue at the moment is how Tesla will run its new hybrid system in terms of dealers.  A number of states are opposed to Tesla Motors Inc. (NASDAQ:TSLA) setting up its own network of dealers for the sale of vehicles to end consumers.

Franchise dealers in a number of states argue that Tesla Motors Inc. (NASDAQ:TSLA) will have to sale its vehicles through already existing franchise networks as is the case with other automakers.

Andor Capital Management, led by Daniel Benton has 16.27% of its equity portfolio invested in Tesla Motors Inc. (NASDAQ:TSLA), comprised of 1.25 million shares.

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