Tesla Cuts All Retail Employee Commissions Before It Starts Closing Stores

Shortly after Tesla revealed that it will close down most of its retail outlets to focus on online sales, it’s emerged that the electric automaker has also axed bonuses for staff at its retail locations.

Electrek reports that Tesla has started removing all commissions retail employees earn from sales. According to some employees, these bonuses represent the majority of their overall compensation and has allowed some sales staff to earn six figures annually.

Many of Tesla’s retail staff speculate that the manufacturer has cut bonuses to try and push them out before Tesla needs to layoff staff and pay severance.

Carscoops has contacted Tesla to ask about the removal of bonuses for staff and are awaiting a response. The company declined to comment after Electrek issued a similar request.

Late last week Tesla made the controversial decision to close many of its stores as it looks to sell vehicles exclusively online. The company claims that by doing this, it will be able to reduce prices for its vehicles by an average of 6 per cent and allow it to produce the entry-level, $35,000 Model 3 sedan earlier than anticipated.

There are currently 120 Tesla stores across the United States, many of which are in malls and shopping centers.

According to Elon Musk, 78 per cent of Model 3 orders the company received last year were placed online. In addition, 82 per cent of Model 3 customers purchased the vehicle without test driving first. Musk hasn’t stated how many Model S and Model X sales are made online and how many are made in the company’s stores.

In a statement issued to Tesla’s retail staff, he did explain the reasons and expressed his gratitude for all their work.

“This is a hard decision, but it [is] necessary to make our cars more affordable. Our sales team has fought on the front lines of advancing our mission and has been our connection to hundreds of thousands of customers along the way. I want to express my sincere gratitude for all that you’ve done,” Musk said.

  • EM1

    Customers want to test drive and see the vehicles up close, how will they do that without stores? I thought the sales people were not commissioned.

    • G82FS

      From the Tesla site…
      “If you haven’t test driven the car, you can return it within 7 days or 1,000 miles, whichever comes first.”

    • Michael Cohen

      The sales staff don’t get commission, they get bonuses, wink wink.

  • OUCH.

  • mihsf

    That’s how a company disrespects its employees. It’s not because it’s legal that it is moral.

  • Super Rob

    I sure hope Elon doesn’t think that 78% number has any chance of staying that high. Tesla and the EV is a novelty right now. There is the prestige factor and bragging rights amongst your friends. But that isn’t going to last. Tesla will be competing against everyone soon enough. Without dealers with parts and service it’s going to be tough.

  • Smith

    It is undoubtedly the beginning of the end for Tesla. Another 2 years and they will be done and sold off for cattle feed. Old (obsolete) battery technology; traditional chassis technology with using high cost and hard to stamp aluminium instead of steel; traditional manufacturing technology with stampings being assembled in regular style production facility; valuation that has been manipulated beyond belief and that positions the company as too expensive for any sensible investor. Not much future or chance of anyone buying them, unless you’re stupid.

  • I don’t understand how you can buy a Tesla, or any other car without a proper test drive. You’re supposed to live with the car. But hey I’m the guy who test smartphones before buying them, so what would I know?

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