Tesla closes the first shop it opened in China in 2013

03 November 2022

It looks like Tesla is seriously reconsidering its expenses and looking for savings wherever they can be found. According to local press, the very first Tesla shop opened in 2013 at the Parkview Green shopping mall in Beijing, has been closed down with its lease not being renewed.

This move can signal that Tesla is focusing on suburban stores and is considering pulling out of the expensive locations in shopping malls. There are 17 Tesla experience stores in Beijing still operating and the company has more than 200 stores across China.

The issue here is that more than half of those stores do not offer any sort of servicing, they are purely experience stores where customers can have a look at Tesla vehicles and order one if they wanted to. With a growing fleet of vehicles, the company has to increase the number of service points which means much bigger facilities.

Tesla won’t close down the experience stores any time soon - not all of them, that’s for sure. But the company is looking to even further increase its profit margins, which means it needs to find more savings. Although the stores with service facilities are bigger, they are usually located in suburban areas and therefore are much cheaper to lease.

Having more service points will mean much better customer relations and actually another revenue stream for Tesla, servicing business has been a good income source for the automotive industry since the invention of the vehicle. Yes, electric cars don’t need as much servicing as gas-powered vehicles, but they still need it and repairs are a lucrative business.

It may feel like it is a big moment for Tesla to close its first ever shop in China but for the company it is strictly a business decision. The company made $5.13 billion in the third quarter of this year in China alone - that’s nearly a quarter of its entire revenue for that period. 77,613 Tesla models were sold in China in September alone.

The sales in China are slowing down a bit and Tesla has taken aggressive steps to reignite interest in the brand. For the first time it has lowered prices for both the Model 3 and Model Y with the latter for the first time being able to qualify for the state EV tax incentives.

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