This business model allows Tesla to be incredibly agile in a slow moving marketplace.
With the current auto market, there is a lull between what consumers want and the production facility. Remember when Ford was cranking out SUV's and then the economy tanked, gas prices went through the roof and nobody wanted SUV's anymore? Ford's plants were still producing SUV's and shipping them to dealers who didn't want them and couldn't sell them. They were taking a huge loss on every one of those Explorer's they produced.
Tesla's model allows them to change much faster to the needs of the consumer, without wasting a lot of production costs and overhead. I think the time is right for a huge disruption in this industry.
With the current auto market, there is a lull between what consumers want and the production facility. Remember when Ford was cranking out SUV's and then the economy tanked, gas prices went through the roof and nobody wanted SUV's anymore? Ford's plants were still producing SUV's and shipping them to dealers who didn't want them and couldn't sell them. They were taking a huge loss on every one of those Explorer's they produced.
Tesla's model allows them to change much faster to the needs of the consumer, without wasting a lot of production costs and overhead. I think the time is right for a huge disruption in this industry.