As Tesla continues to become more popular in China, the automaker has closed one of its flagship showrooms in Beijing with an eye on growing its vehicle service offerings in the country.
According to a report from Reuters, Tesla has decided not to renew their lease at the Parkview Green shopping center, citing a mall employee who did not want to be identified. This was the location of Tesla’s very first showroom in China that it opened in 2013.
Since taking over the space in 2013 Tesla has expanded their footprint and renovated the space to occupy two floors of the mall.
The closure of the showroom comes after reports that Tesla was considering shutting down some of their retail locations in expensive malls. High rent and reduced foot traffic since COVID-19 were also reported factors in this shift of Tesla’s retail strategy.
The closure should not be seen as a sign of waning demand in China. In fact, Tesla is instead going to focus their efforts on growing service for new and existing owners by expanding out into more suburban areas with more space and cheaper rent.
Tesla’s Careers website in China currently has over 300 job postings published for service related jobs, including positions for locations in more suburban areas.
These new Service Centers will be needed as Giga Shanghai is producing and delivering a record number of cars in recent months. Over the last two months alone Giga Shanghai has produced 158,693 new Model 3 and Model Y cars, while selling 160,100 over the same time period.
Those figures are likely to grow even further with improvements to Giga Shanghai’s production lines to increase output, paired with recent price cuts across the lineup that makes the entry-level Model Y eligible for the country’s EV purchase incentive.