Can Tesla Be the Auto Industry’s Apple?
Tesla Motors (NASDAQ:TSLA) is opening new outlets modeled on Apple (NASDAQ:AAPL) Stores to drive up sales of its latest models, starting with the Model S sedan. This year will see the addition of 10 stores — in the Northeast U.S., Portland, Oregon, and Scottsdale, Arizona — to take the total number of the company’s showrooms to more than 30. The company will add between 25 and 30 more outlets next year.
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“We’re opening up stores to get a run rate of reservations to achieve that 20,000 rate,” said George Blankenship, Tesla’s vice president of sales. “Every time we open a store, people can’t wait to get there.”
Blankenship, who designed Apple’s stores before joining Tesla, said the carmaker’s showrooms will be essential in creating demand for its cars. “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?”
Direct deliveries of the Model S to retail customers started on Monday. According to the company, 10,000 orders have been received for the car that ranges between $57,400 and $105,400. The top-end version can go as far as 265 miles per charge. Daimler AG and Toyota Motor (NYSE:TM) are investors in Tesla.
Jefferies analyst Jesse Pichel reiterated his Buy rating and $39 target on the stock. “If Apple made a car, this would be it,” Pichel wrote in a research note to investors Friday. “Our 2 behind the wheel test drives of the Model S confirmed our thesis that this is the best performing performance sedan under $100,000. Our factory tour by the CTO, JB Straubel, and CFO, Deepak Ahuja, gives us confidence the 5,000 unit sales target will be easily met.”
The nine-year-old company is yet to post an annual profit, but its shares have risen 18 percent this year.
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