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Tesla Motors Inc (TSLA) Isn’t Strong Enough for Detroit Says Lutz

Tesla Motors Inc NASDAQ:TSLA

Tesla Motors Inc is a firm that cannot be figured out easily. Its employee strengths comprise of talented people who are good at doing things that are both amazing and innovative, but at the same time there are few things that could bring the firm to a halt.

Tesla Motors Inc NASDAQ:TSLA

Auto majors could crush Tesla

Bob Lutz, the legendary auto industry executive, believes Tesla could get in trouble when established auto giants come up with their own fleets of electric cars. Lutz believes that once the competing firms launch their own EVs in the market, they will definitely take away all major business from Tesla.

Lutz said Musk’s decision to sell cars only at factory stores is creating a “money pit” for the firm in the same as it did for Porsche during his tenure. “I think Tesla CEO Elon Musk figured that if factory stores work for Apple, they’ll work for Tesla.”

Explaining why this approach is wrong, Lutz said the fixed costs of Apple Store are almost negligible when compared with those of a car dealership. A mall storefront and a staff for kids is all that is needed to sell the phones and laptops. But, a car dealership is very different. It needs multiple acres of space and a huge building with service bays, chargers, a trained sales force including people in finance and accounting. Above all, a huge amount of capital gets tied up in inventory.

Concluding his remarks, Lutz said, “history’s filled with defunct companies with great products run by brilliant people,” and Tesla could be one of them.

Tesla preparing for holiday season

Meanwhile, Tesla Motors Inc is busy with the preparations of the holiday season. Tesla customers will get a chance to get the first-hand experience of the firm’s products at the pop-up shops that Tesla is opening across the U.S. With such a concept, the brands get an opportunity to experiment with different retail locations and reach out to customers, who might not be accessible to them otherwise.

Tesla is using the pop-up stores to expand its audience, and increase awareness among people about the concept of EVs. In 3 months from October- December, the firm will have its pop-up shops throughout the U.S. The first was opened on Oct. 16 in San Antonio, Texas, and will remain operational until Dec. 27, says a report from Luxury Daily.

In November, Tesla Motors Inc will cover west coast opening pop-up shops in Santa Monica, CA, Tucson, AZ and Las Vegas, among others.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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