Instead of traditional franchised dealerships, Tesla Motors [NSDQ:TSLA] sells its electric cars directly to customers through a chain of company-owned retail stores.
These stores are usually located in shopping malls alongside upscale department stores and boutiques, but now Tesla plans to actually sell cars inside an upscale department store.
Tesla will open a “gallery” in Nordstrom at The Grove, a large retail complex in Los Angeles, according to Fast Company. The site will stay open through the end of the year as a pilot, while Tesla and Nordstrom gauge whether to open similar setups in other locations. The 400-square-foot display will include a Model X electric crossover and Tesla will offer test drives onsite.
Tesla Store Los Angeles [photo: Misha Bruk / MBH Architects]
The carmaker says it’s in the process of obtaining a California sales license for the Nordstrom gallery. Until then, employees won’t be able to discuss purchases directly with customers. Instead, they’ll have to direct those customers to off-site sales associates, licensed Tesla stores (there are already 27 of them in California) or Tesla’s website.
California does allow Tesla to sell cars directly to customers, so the sales license should be obtainable. Other states like Michigan and Texas explicitly prohibit the practice. Last year, Michigan changed its franchise laws to ban direct sales, and other states instituted bans or added restrictions to existing laws, usually with the support of local auto-dealer associations.
Tesla’s partnership with Nordstrom could spark some new legal battles, but it will also help the company expand its retail footprint. CEO Elon Musk recently announced that Tesla will try to build 500,000 cars per year by 2018—not 2020 as originally planned—so more stores couldn’t hurt.