Scott Duke Kominers, Columnist

Tesla’s Online Selling Is a Big Bet on Millennials

We’ll never know if people will buy cars only on the web unless someone tries it.

March 6, 2019 at 12:30 PM UTC

Scott Duke Kominers is the MBA Class of 1960 Associate Professor of Business Administration at Harvard Business School and a faculty affiliate of the Harvard University department of economics.

There’s no going back.
Photographer: Mark Ralston/AFP/Getty Images

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Last week, Tesla Inc. said that it is closing almost all its dealership showrooms in order to cut costs as it steps up production and sales of its midpriced Model 3. If markets are to be believed, this isn’t a good look; the company’s stock price has tumbled in response.1

Closing retail stores could be a sign of desperation, a view reinforced by concurrent announcements that the company has reduced its earnings expectations and will be cutting jobs.2 And the news was certainly jarring, coming just a few weeks after Tesla said dealerships were an important part of its retail strategy.