- In an email to employees explaining recent showroom closures, Elon Musk stated that 82% of customers bought their Model 3 without ever having taken a test drive, and 78% of all Model 3 orders were made online.
- According to a recent report by Forbes, car salespeople remain “one of the least trusted professions in America today” (only beat by members of congress).
- In the US, customers can currently buy Teslas online on their phones, with the company allowing the car to be returned within 7 days or 1,000 miles for a full refund.
Analysis and Comments
- While Tesla has reversed its decision to close most of its showrooms in favour of raising prices on some of its more expensive models, the above stats still shed light on an interesting development within the car sale industry.
- Online sales of new cars are a global phenomenon, with new business models emerging in various regions, particularly the US.
- Multiple studies have found that customers are willing to buy a new or used car online (with approval rates as high as 75%+), and this includes online platforms from OEMs (which are trusted most) as well as third party platforms.
- It will be interesting to see how new technologies such as VR (e.g. for virtual car presentations and test drives) will impact people’s willingness to buy online – particularly as Millennials (i.e. digital natives) are approaching the average age range for purchasing cars.