Tesla's long-awaited $35,000 Model 3 car has finally arrived, with significant tradeoffs.

CEO Elon Musk announced Thursday that Tesla is moving all of its vehicle sales online, closing an unspecified number of stores, and laying off more employees, The Wall Street Journal reports. The changes will allow Tesla to deliver on Musk's longtime promise of offering an affordable, mass-market electric vehicle, but also come with new uncertainty, as selling cars before a test drive is an unproven model. Musk also noted that Tesla will not be profitable this quarter, following two quarters of profitability, but said he expects Tesla to be profitable again in the second quarter of 2019. 

"Ultimately, this will be a very strong competitive strength for Tesla," Musk said during a conference call on Thursday, the Journal reported. "This will be a fundamental long-term competitive advantage of Tesla that ... only a startup could replicate."

Customers who buy a Tesla online can return it for a full refund within seven days or 1,000 miles, whichever comes first. This essentially means that Musk is betting on consumers' willingness to at least temporarily part ways with $35,000.

"While, in theory, the seven-day return policy is a great thing if you can't test-drive, you have to pay for the car in full," Sam Abuelsamid, a senior analyst with Navigant research, told WSJ. "With a traditional dealer, you can do it for free."

Musk said a few stores in high-traffic locations would remain open as galleries and Tesla information centers, according to an email he sent to employees reported by CNBC.

Published on: Mar 1, 2019