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Tesla’s retail strategy set to change for the third time in three years

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Tesla is set to change its retail strategy for the third time in three years. The automaker has relied on retail showrooms in shopping malls in high-end locations, but this is set to change. Additionally, Tesla may be remotely managing test drives and deliveries, moving to a more virtual setup instead of spending money on expensive real estate inside shopping centers.

The plan is somewhat similar to the early 2019 plan that CEO Elon Musk talked about during a press call in February of that year. After concerns that some employees would be relieved of their duties due to store closures, Musk indicated that there would be a reduction in headcount. Tesla eventually backtracked on this strategy, and more retail locations were opened throughout 2020.

However, the 2021 plan is much different and extends a refined focus on keeping Tesla’s employee headcount the same while eliminating some expensive retail locations. In 2018, Tesla committed to opening more showroom locations inside high-end malls that provided more foot traffic.

Credit: @JustJay25122288 | Twitter

Now, for the third time in three years, Tesla is revising its plan for showrooms and retail locations alike, with plans to close the sales centers in the high-end mall locations, according to Electrek.

According to the report, Tesla is now planning to cut ties with the high-end locations due to rent obligations, which are likely high and unrewarding. Instead, delivery centers will take a bigger focus as an overwhelming number of Tesla owners placed their orders online. Because of this, test drives are also being handled remotely, a strategy that was loosely adopted during the COVID-19 pandemic to eliminate human contact. The test drive experience is one of the most pleasant available due to the lack of sales pressure from a salesperson.

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Employees will no longer be assigned to a store. Instead, they will be assigned to a “central virtual store” and will assist online buyers in specific markets. This will eliminate the need for Tesla to let go of employees, keeping the workforce the same but eliminating the costs of leasing a retail space.

The retail locations won’t go away altogether, however. Tesla is reportedly still planning to keep showroom locations open if they are affordable and reasonable. It seems that the expensive rent in high-end facilities is just not justified, even though the company is financially stable, unlike in 2019 when the Model 3 was still giving Tesla some financial bottlenecks as the company ramped deliveries in Europe.

These high-end showroom locations will likely dissipate slowly over the next few years as leases expire. It is unknown what the financial threshold is to consider a location to be a financial disadvantage. However, the money Tesla can reserve can be spent on product development or the expansion of Delivery and Service Centers through the next several years. As Tesla continues to expand its market and demand increases steadily, Delivery and Service Centers will take the forefront. Showroom locations will slowly become less important, especially due to the advantageous nature of ordering a vehicle online.

Don’t hesitate to contact us with tips! Email us at tips@teslarati.com, or you can email me directly at joey@teslarati.com.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Ford is charging for a basic EV feature on the Mustang Mach-E

When ordering a new Ford Mustang Mach-E, you’ll now be hit with an additional fee for one basic EV feature: the frunk.

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Credit: Ford Motor Company

Ford is charging an additional fee for a basic EV feature on its Mustang Mach-E, its most popular electric vehicle offering.

Ford has shuttered its initial Model e program, but is venturing into a more controlled and refined effort, and it is abandoning the F-150 Lightning in favor of a new pickup that is currently under design, but appears to have some favorable features.

However, ordering a new Mustang Mach-E now comes with an additional fee for one basic EV feature: the frunk.

The frunk is the front trunk, and due to the lack of a large engine in the front of an electric vehicle, OEMs are able to offer additional storage space under the hood. There’s one problem, though, and that is that companies appear to be recognizing that they can remove it for free while offering the function for a fee.

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Ford is charging $495 for the frunk.

Interestingly, the frunk size varies by vehicle, but the Mustang Mach-E features a 4.7 to 4.8 cubic-foot-sized frunk, which measures approximately 9 inches deep, 26 inches wide, and 14 inches high.

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When the vehicle was first released, Ford marketed the frunk as the ultimate tailgating feature, showing it off as a perfect place to store and serve cold shrimp cocktail.

Ford Mach-E frunk is perfect for chowders and chicken wings, and we’re not even joking

It appears the decision to charge for what is a simple advantage of an EV is not going over well, as even Ford loyal customers say the frunk is a “basic expectation” of an EV. Without it, it seems as if fans feel the company is nickel-and-diming its customers.

It will be pretty interesting to see the Mach-E without a frunk, and while it should not be enough to turn people away from potentially buying the vehicle, it seems the decision to add an additional charge to include one will definitely annoy some customers.

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Tesla to improve one of its best features, coding shows

According to the update, Tesla will work on improving the headlights when coming into contact with highly reflective objects, including road signs, traffic signs, and street lights. Additionally, pixel-level dimming will happen in two stages, whereas it currently performs with just one, meaning on or off.

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Credit: @jojje167 on X

Tesla is looking to upgrade its Matrix Headlights, a unique and high-tech feature that is available on several of its vehicles. The headlights aim to maximize visibility for Tesla drivers while being considerate of oncoming traffic.

The Matrix Headlights Tesla offers utilize dimming of individual light pixels to ensure that visibility stays high for those behind the wheel, while also being considerate of other cars by decreasing the brightness in areas where other cars are traveling.

Here’s what they look like in action:

As you can see, the Matrix headlight system intentionally dims the area where oncoming cars would be impacted by high beams. This keeps visibility at a maximum for everyone on the road, including those who could be hit with bright lights in their eyes.

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There are still a handful of complaints from owners, however, but Tesla appears to be looking to resolve these with the coming updates in a Software Version that is currently labeled 2026.2.xxx. The coding was spotted by X user BERKANT:

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According to the update, Tesla will work on improving the headlights when coming into contact with highly reflective objects, including road signs, traffic signs, and street lights. Additionally, pixel-level dimming will happen in two stages, whereas it currently performs with just one, meaning on or off.

Finally, the new system will prevent the high beams from glaring back at the driver. The system is made to dim when it recognizes oncoming cars, but not necessarily objects that could produce glaring issues back at the driver.

Tesla’s revolutionary Matrix headlights are coming to the U.S.

This upgrade is software-focused, so there will not need to be any physical changes or upgrades made to Tesla vehicles that utilize the Matrix headlights currently.

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xAI’s Grok approved for Pentagon classified systems: report

Under the agreement, Grok can be deployed in systems handling classified intelligence analysis, weapons development, and battlefield operations. 

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Credit: xAI

Elon Musk’s xAI has signed an agreement with the United States Department of Defense (DoD) to allow Grok to be used in classified military systems.

Previously, Anthropic’s Claude had been the only AI system approved for the most sensitive military work, but a dispute over usage safeguards has reportedly prompted the Pentagon to broaden its options, as noted in a report from Axios.

Under the agreement, Grok can be deployed in systems handling classified intelligence analysis, weapons development, and battlefield operations. 

The publication reported that xAI agreed to the Pentagon’s requirement that its technology be usable for “all lawful purposes,” a standard Anthropic has reportedly resisted due to alleged ethical restrictions tied to mass surveillance and autonomous weapons use.

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Defense Secretary Pete Hegseth is scheduled to meet with Anthropic CEO Dario Amodei in what sources expect to be a tense meeting, with the publication hinting that the Pentagon could designate Anthropic a “supply chain risk” if the company does not lift its safeguards. 

Axios stated that replacing Claude fully might be technically challenging even if xAI or other alternative AI systems take its place. That being said, other AI systems are already in use by the DoD. 

Grok already operates in the Pentagon’s unclassified systems alongside Google’s Gemini and OpenAI’s ChatGPT. Google is reportedly close to an agreement that will result in Gemini being used for classified use, while OpenAI’s progress toward classified deployment is described as slower but still feasible. 

The publication noted that the Pentagon continues talks with several AI companies as it prepares for potential changes in classified AI sourcing.

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