Tesla Moving Out Of The Mall And Into The Parking Lot In Retail Shake-Up

Tesla (TSLA) is looking to close some of its mall showrooms, opting instead to move to parking lots and warehouses to show off its electric vehicle lineup.

According to Electrek, the electric carmaker is looking to overhaul its retail strategy and move away from malls to cheaper locations, where it can also remotely manage test drives of its fleet and operate delivery centers.

Tesla first moved to high-end, heavily trafficked malls in 2018.

In 2019, CEO Elon Musk upended the company’s retail model, announcing that most stores would be closing as the company focused entirely on e-commerce orders after seeing the majority of Tesla buyers already making their car purchases online, CNBC reported.

But Musk reversed course a few weeks later and said stores would stay open.

Now, two years later, the Tesla CEO seems to have changed his mind again, and sources for Electrek said that the automaker will close some mall locations, but it will keep its retail workforce intact.

Tesla’s website said it had 170 galleries and showrooms across the U.S. in malls.

Electrek said that Tesla will shutter most of its high-rent mall stores and shopping districts while expanding its presence in locations such as mall parking lots, warehouses, and other locations.

Tesla’s departure from shopping malls adds to the growing list of retailers who have closed their brick-and-mortar stores in recent months, leaving mall operators with vacant storefronts on their properties as foot traffic slows during the pandemic.

Mall operators such as Simon Property Group and Macerich could take a hit with Tesla’s departure as both count the automaker as a tenant, CNBC said.

Shares of Tesla were trading at $648.72 as of 10:43 a.m. EDT on Wednesday, up $3.94, or 0.61%.