Tesla raises $82.5 million for new retail stores

Tesla Motors in Los Angeles, Calif.

(Credit: Tesla Motors)

Tesla Motors has garnered $82.5 million in "Series F" funding for the purpose of expanding its chain of stores in North America and Europe.

The deal was first announced Monday by participating investor Fjord Capital Partners. Tesla Motors then confirmed the deal to several news outlets on Tuesday. Daimler, already a 10 percent investor in Tesla, and Abu Dhabi fund Aabar Investments also contributed to the fund.

The California-based electric-vehicle manufacturer has had stores in Los Angeles and Menlo Park, Calif., for some time. It recently opened stores in New York, Chicago, Miami, London, Seattle, and Munich. It has plans to open a store in Monaco before the end of the year, and has said it's scouting for locations in Washington, D.C., and Toronto.

But don't call them dealerships.

Because the electric cars are light on service work, and don't need things like oil changes, Tesla plans to forgo the traditional dealership/service business model of yesteryear's car industry. Instead the company plans to maintain full retail control over its cars and brand, Tesla announced in early September.

Tesla Motors in Menlo Park, Calif.

(Credit: Tesla Motors)

"Tesla takes its showroom cues from Apple, Starbucks and other customer-focused retailers. Tesla stores provide a welcoming spot to surf the Web, test drive cars and learn more about Tesla, the only production automaker selling highway-capable EVs in North America or Europe," Tesla said in statement.

News of the latest funding deal also follows the unveiling of Tesla's production model of the Model S sedan, as well as a tuner version of its Roadster, at the 2009 Frankfurt auto show this week.

The prototype of the Model S was unveiled in March as a way to augment Tesla's lineup with a more "economical" option to its Roadster luxury sports car. The Model S is expected to cost around $50,000--about half the cost of the Roadster.

[ivorycruncher]

Great. Now you just need to get practical (i.e. not tiny) vehicles down to the $15,000-25,000 ballpark, and we'll talk.

[Crankypaul]

Let's see how this flies. On the one hand the economy is starting to turn around and those who will spend for these vehicles are loosening up their purse strings a bit. On the other hand this is still not a practical all around high volume vehicle, and as was posted, not in the "affordable" range. And since there seems to be an onslaught of competition from the majors who already have distribution in place, Tesla is still pushing the pile up the hill.

[ibeetle]

As any automobile company ever been successful selling cars directly to the consumer? And if they are going the direct route why? Can they not find anybody to bite to be a dealer? Or do they think that they have a unique product that needs to be sold in a different way?

I do not buy the light on maintenance. Their cars will still need tires, starters, battery work, brakes, a/c maintenance and repair and a list of other. And are not all cars today "light" on maintenance. My car requires service every 10,000 miles or 10 months. And after 4 years and 50,000 miles only been in the shop 6 times. 5 for service and 1 for a repair that was covered under warranty.

I do not mean for any of this to seem anti-Tesla, it is not. I just find it a interesting way to sell cars.

[ColeSlaw82]

I'm hoping they just focus on selling cars and get third party service shops to do all their maintenance. I don't know for sure, but I bet existing tire dealers and repair shops could probably do quite a bit of the required maintenance without any special training. Hopefully Tesla makes any special training needed to repair the car available to all the 3rd party repair shops that want it.

[Joe Real]

I'm wondering what the price would be of their Tesla Sedan. For a 300 mile range, their suggested price of about $57K would be an excellent alternative to the Chevy Volt which is priced at around $40K for a 40 mile range. It is like adding just $17K for additional 260 mile battery range and you never get to use gas anymore, at least for my driving needs (or it will be a rental car beyond that). Hope the Tesla Sedan is luxurious. But with the upcoming Fisker Sedans, and others, there could be excellent competition and hopefully price wars.

[Inconnux]

Its a good trend, but the cost is still too high for your average consumer

[ryokowerx]

Yes but these cars aren't for the average consumer. The people with the money buy the expensive roadsters and luxury cars. This helps them recoup development costs as well as act as a testbed for more economical models down the road. It's essentially the early adopter technology model. You pay for the bleeding edge while the rest of us hang out and wait for the cheaper next generation.