Tesla shifts to online sales model, closes stores

If you want to test drive a Tesla, you better do it now. The electric car maker announced they are closing their showrooms and moving to an all online sales model. 

When it comes to car sales, Tesla has always done things differently.

Noah Herman was checking out the store at Santana Row in San Jose. He says, "The sales model for Tesla makes it so compelling because they have these stores that are like in a mall."

But not for long. They say cutting costs will enable them to improve service on the cars and to lower prices, dropping the Model 3 to $35,000.

Industry analysts say it's a bold move.

Michael Coates, editor of Cleanfleet Report says, "Maybe Elon is getting his space business mixed up with his car business because they're taking their car business where no car maker has gone before."

So could an all online model work? Experts say people already do most car research online, but eliminating a show room and test drives is uncharted territory.

Coates says, "We're in a new age. So I think that direct selling clearly works. Direct selling on the internet only has not been proven yet."

Tesla executives say their return policy will eliminate the need for test drives: allowing you to bring a car back after seven days or 1000 miles if you're not satisfied.

Still, car shoppers say buying something sight unseen is a big leap of faith.

Car shopper Deborah Darington says, "It's a big name. Everybody knows it. And around this area they're on the streets a lot. But what about areas that they're not?"

Car shopper Harry Walker says, "You have to get the feel of the automobile. You want to know how you feel inside that automobile. And that's the only way I've ever bought an automobile. It's hard to teach an old dog new tricks."

Tesla officials want to stress the transition will take several months. And they say a few locations in high traffic areas may stay open as information centers.