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Tesla Pulling Out Of High-End Malls, Adding Delivery Centers In Cheaper Spots


Another tough blow has been dealt to shopping mall landlords, and this time, Class-A malls will be feeling the pain.

Tesla will be vacating many of its showrooms within luxury malls as it focuses its sales teams on remote working, Electrek reports. The electric car maker founded by Elon Musk will instead look to lease space in mall parking lots, warehouses and other less expensive property types to keep cars for test drives and deliveries.

Tesla has over 170 showrooms across the U.S., many of them in high-end malls such as the King of Prussia Mall in the Philadelphia suburbs and NorthPark Center in Dallas. Mall landlords like Simon Property Group and Macerich have credited Tesla as a major driver of foot traffic akin to Apple Stores, CNBC reports.

The automaker already began a push to build more service centers for its highly specialized vehicles last year, with a particular focus on the Northeast. Some future locations could combine the functions of a service center with test drives and deliveries to make an all-in-one Tesla Center, Electrek reports.

As far back as 2019, Musk announced that he was directing Tesla to pull out of its expensive showroom locations since a satisfactory amount of sales came from online shopping anyway. The company months later walked back his statements, Electrek reports.

Musk's original plan called for layoffs of retail employees, but the current plan for its retail shift involves hiring more sales reps to work without being assigned to a specific store, Electrek reports. Online shoppers who visit Tesla's site would be assigned a sales rep who would then guide the consumer to a test drive center and unlock a car remotely.

Tesla's real estate needs also include spots for charging stations, and the company has reportedly been seeking real estate partners to expand its charging network since April. For mall landlords who have installed charging stations at the same shopping centers where Tesla has showrooms, the chargers will likely remain in place, Electrek reports.