One of the first things you will notice when you begin researching a new Tesla is its unique approach to sales. They don’t offer the same, traditional style of walking into a showroom and speaking with multiple reps chomping at the bit for your business.
Does Tesla have car salesmen? Tesla decided to make a move to online-only sales in early 2019. So, while they do not have traditional sales reps circulating throughout a showroom with the goal of having you drive off the lot with one, they do have sales advisors at locations to educate consumers on the cars and how to order them online.
Some experts say this is an ideal shakeup in the industry, as customers don’t want to deal with a salesperson during much of the car-buying experience. Others question the company’s cash flow and reasons for the change. But whatever your opinion on it, the structure is an exciting and bold move by CEO Elon Musk.
Do Tesla Salespeople Work on Commission?
The massive restructuring of their sales process and shift to online-only meant major changes for the sales reps as well. The official term at Tesla for their sales reps is a Sales Advisor. Tesla Sales Advisors receive $200 commission for cars they have in inventory that are delivered by the end of the quarter.
But according to Business Insider, salespeople from Tesla are upset by commission structure changing based on inventory. According to these employees, they no longer receive that $200 commission check if the car was ordered while not in inventory. This means newer vehicles that have not come in yet but are being pre-ordered by customers will mean no commission for the sales rep.
This is also the same for any model that happens to be out of their inventory when the car is purchased. Tesla keeps their inventory very low for specific models, making the new commission structure a sticking point for many sales reps.
How Much Tesla Salespeople Make
According to Indeed, the average salesperson at Tesla is making $43,882 per year. While employees of Tesla are not allowed to discuss their salaries with anyone outside the company, many employees have anonymously reported their earnings to sites like Indeed.
How Do Bonuses Work?
Tesla changed its bonus structure for sales reps around the same time as the shift to online-only sales. They used to be based on the individual’s sales performance, but they are now tied into the whole store’s performance.
Each location now gets a monthly bonus set based on a percentage that they have to attain as a team, regardless of individual performance.
Upcoming Compensation Changes
While the current commission model is $200 for models they have in their inventory, there are more changes on the horizon for Tesla sales reps. As reported by electrek, Tesla will be eliminating the commission structure, which has low approval ratings from current and former employees.
To compensate for the change, sales advisors are being told they will see a 20% to 40% increase in their salary. As far as the bonus structure, they will still offer bonuses but with stock options. Every quarter, once goals are achieved, they will have different options for Tesla stock.
These changes are said to help them focus on deliveries. According to CNBC, Tesla has delivered 97,000 cars globally during Q3 of 2019. Elon Musk predicted that Tesla would deliver between 360,000 and 400,000 vehicles in 2019. This is a goal that appears they may make for the year.
With the new focus on delivery quality, timing, and costs, it means they need to make those changes, once again to the sales structure.
What Sales Advisors do at Tesla Locations
Education is a significant part of the sales process for Tesla. With the new technology these cars possess, it is an entirely different ballgame when you begin to research them. With standard gas-run cars, there won’t be as many questions, typically. A new model will always bring up a few questions but making the switch to a Tesla will provoke many more.
When you walk into a dealership, your primary M.O. is typically, “How do I get the best price?”
But when you walk into a Tesla location, it’s geared around the educational process—“How do these things work?” Anyone can go online and order a car or do their research. But going into a store will be a much more fulfilling experience when you feel lost as to how it all works.
Some of the top items that salespeople cover with customers are:
- Where and how to charge Teslas
- How government incentives work and what their potential incentive would be
- Comparisons on cost for electricity vs. gas
- Tutorials on the features of the car and how to maximize all of its features
This won’t be your typical test-drive and a basic rundown of facts. Salespeople will sometimes take hours covering all aspects of these highly advanced cars with prospective customers.
This is one of the reasons that other dealerships don’t typically take used Teslas. The educational process is much more in-depth than with other cars. They don’t always want to have their reps take the time to be fully trained on these models.
Tesla salespeople are trained for Tesla models and nothing else. Traditional car salespeople will typically have a brand or two that they specialize in, but they can speak to most different types. Because Tesla is so specialized and they only sell their cars, the experience is different from the perspective of both the salesperson and customer.
New Locations on the Horizon
With Tesla changing the sales compensation structure again, they also have new locations on the way. Part of the reason for the change in compensation was due to a focus on more deliveries. As part of its new focus, the company is also rethinking how the locations operate.
The new locations will be functional for sales, service, and delivery and will be open seven days per week. Having everything in one location is expected to help the sales advisors as they can boast the convenience of the new sites and setup. These “Tesla Centers,” as they will be called, are meant to bring a more personal touch to the sales process without going to the traditional car sales lot. For a list of current locations, click here.
Home Solar Systems and Car Sales
With all of these changes coming down the pipe, they also decided to have sales advisors for Tesla work side-by-side with energy advisors selling their home solar systems. Tesla’s main initiative is to sell energy. So combining the car sales with their home solar solutions is a package that makes sense from a marketing standpoint.
From the standpoint of the sales advisor, it is a way to show a united front across the company in their efforts to bring energy-efficient solutions to consumers.
Tesla’s Evolving Sales Structures
Although Tesla has been going back and forth a bit in its sales structure and process, it seems their newest plan for raised salaries and cut commissions will help increase overall compensation for their salespeople. And although it is not a traditional sales role, it is one that requires a lot of training and education in the solar and energy world.
Their sales advisors are aptly named, as they truly are there to advise and educate consumers on their options and how Tesla works. Although the company has seen some growing pains due to the changes, they may be on the right track to delivering exactly what people want; a no-hassle sales process with an advisor who is there to educate rather than “sell.”