The CEO of Carvana, one of the top online car retail companies, recently stated that Tesla focusing solely on online sales was a much smarter bet than some originally thought.
“I think every business has its challenges, but they‘ve done a pretty good job overall, I wouldn‘t be betting against them,” CEO Ernie Garcia, said Thursday on CNBC‘s Squawk Alley. “I think when you buy a new car, questions are different, but the return policy is enormously powerful like it is on the used side. A customer knows they can return it.”
Tesla shares were up more than 1 percent Thursday.
Tesla‘s shift to online sales has garnered mixed reviews from some investors, with some saying the move could substantially reduce costs by eliminating stores, but also worrying that Tesla is losing a valuable sales strategy.
“The move to direct sales is bold, though we are comforted that 70%+ of Tesla buyers in 2018 did *not* test drive prior to purchase,” wrote in a research note shortly after Tesla‘s announcement a week ago. “That said,” he added, “we do believe that salespeople have been important in up-selling Tesla customers, as well as selling Tesla solar products.”
The move will result in the closure of most of Tesla‘s stores and layoffs. over Tesla‘s plans.
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