Friday, June 22, 2012

(BN) Tesla Ties Car Sales Goals to Apple-Style Store Strategy

June 22 (Bloomberg) -- Tesla Motors Inc., the electric-car maker led by entrepreneur Elon Musk, is pinning sales goals for its new Model S sedan on an expanding network of stores, which are modeled on the outlets of Apple Inc.

Direct deliveries to retail customers of the first eight of the battery-powered models began today at Tesla's factory in Fremont, California. Musk has said the company already has 10,000 orders for the vehicle and will deliver 5,300 this year and 20,000 next year.

"We're opening up stores to get a run rate of reservations to achieve that 20,000 rate," George Blankenship, Tesla's vice president of sales, told reporters today in Fremont. "Every time we open a store, people can't wait to get there."

The startup, named for inventor Nikola Tesla, wants to become profitable from sales of the Model S as early as next year. Blankenship, who designed Apple's stores before joining Tesla, said the carmaker's showrooms will be essential in creating demand for its cars, as it eschews the traditional auto-industry model of recruiting outside dealers to sell vehicles.

The 10 new stores to be added this year will be mainly in the Northeast U.S., as well as in Portland, Oregon, and Scottsdale, Arizona, Blankenship said. The expansion will take the company's showrooms to more than 30 this year. Tesla plans to add between 25 and 30 more outlets next year, Blankenship said.

"We're getting an average of 4,000 visitors a week at our stores," he said. "How many car dealerships do you know of that get 4,000 visitors a week?"

Prices for the Model S range from $57,400 to $105,400, prior to a $7,500 federal tax credit, depending on options. The top-end version can go as far as 265 miles (426 kilometers) per charge.

The company, based in Palo Alto, California, counts Daimler AG and Toyota Motor Corp. as investors and has yet to post an annual profit.

Tesla rose 5 percent to $33.79 today in New York. The shares have gained 18 percent this year.

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