In Venice, California, people shopping for electric cars can stroll through the futuristic building that was once the home of science fiction author Ray Bradbury. Potential buyers in New Jersey are shopping in a high-end mall across the hall from an Apple store. And from Denver to Washington state, they are using virtual reality instead of kicking the tires.
Electric vehicle makers are racing to roll out showrooms across the country, looking to create a new type of display space for their sleek and pricey cars and, in the process, becoming a growing tenant type for retail properties.
Just last week, VinFast, a Vietnamese electric car maker, with much fanfare debuted a half-dozen showrooms in California, most in the Los Angeles area. The company, which has its U.S. headquarters in the Playa Vista section of Los Angeles, said it plans to open several dozen more in the Golden State, with the goal of having 30 total by the end of the year.
While VinFast is joined in a fast-growth strategy by some of the biggest electric car makers, these companies don’t all share the same vernacular when it comes to naming the new showrooms popping up. So Lucid Group, based in Newark, California, is continuing to build out a network of U.S. “studios” and service centers, opening its 28th location — its first in the Pacific Northwest — in Seattle last month. Polestar, the Swedish electric car maker, aims to have 35 “spaces” across North America by year’s end.
They are jockeying to compete with dominant electric vehicle maker Tesla, headquartered in Austin, Texas. Tesla has the most retail “galleries,” initially locating them in upscale malls.
“Tesla, being the first to expand utilizing retail, found a tremendous amount of success in attracting a consumer base,” and competitors are “following a very similar path” to the one that the legacy electric car maker laid out, said Jason Greenstone, an executive director of retail services at real estate firm Cushman & Wakefield.
Electric vehicles are looking more alluring to some Americans as gasoline prices soar. But competition in that auto sector has increased, with more players emerging to take on incumbent Tesla. The newer entrants are trying to get their cars out in front of the public, and showrooms in spots with high foot traffic act to get exposure for the brands.
“It’s a growing trend,” said Chuck Lanyard, president of The Goldstein Group, a retail broker in Paramus, New Jersey.
Electric vehicle makers have always had a much different model for selling their cars than traditional carmakers — offering them direct to consumers rather than through dealerships — and their leasing of sites at malls and other locations for showrooms is done to augment online sales.
Some states, including New Jersey, don’t permit automakers to operate their own dealerships to sell new cars, so showrooms are the only option to get a vehicle in front of consumers to peruse in person or to nail down the features the buyer wants for the car he or she plans to order. Even if a state allows an electric vehicle company to have a dealership, there is no need for those manufacturers to have a huge space like a traditional dealer, since they often are only selling a handful of models, in some cases just two or three, Lanyard said.
But it’s been a rocky road for some electric car makers. At least one company that originally announced showroom openings has pulled back on those plans: Rivian Automotive, which is headquartered in Irvine, California.
VinFast, which will be offering all-electric SUVs, is making an audacious debut in the United States, where it is opening its first stores outside of Vietnam. It held grand openings for six retail sites in California on Wednesday.
They are located at:
- Santa Monica Place, 395 Santa Monica Place, Santa Monica.
- Westfield UTC, 4545 La Jolla Village Drive, San Diego.
- Hillsdale Shopping Center, 51 31st Ave., San Mateo.
- Citadel Outlets, 100 Citadel Drive, Commerce.
- The Fourth Street Shops in Berkeley, 1733 Fourth St., Berkeley.
- The Village at Corte Madera, 1618 Redwood Highway, Corte Madera.
VinFast, part of the conglomerate Vingroup, owns a highly automated automotive manufacturing plant in Hai Phong, Vietnam. In addition to targeting 24 more stores in California this year, the company plans to open retail locations in Canada, Germany, France and the Netherlands.
“As the birthplace of car culture in the U.S., California is a natural focus market for VinFast. … California is leading the way in the EV revolution, so there is no better place for us to begin our U.S. expansion than in California,” Craig Westbrook, VinFast’s chief service officer, said in a statement.
Lucid also has been ramping up its retail expansion. In recent months, it’s opened showrooms at The Mall at Short Hills in Short Hills, New Jersey; Cherry Creek Shopping Center in Denver; and most recently at University Village in Seattle, where it also has a service center at 3412 Airport Way S.
“The response to Lucid in Washington state has been tremendous, which reflects the region’s unique embrace of both innovation and the environment,” Zak Edson, Lucid’s vice president of sales and service, said in a statement about the showroom’s debut, adding that there’s a growing number of Lucid Air sedan owners in the Seattle market.
Like most auto showrooms, Lucid’s retail sites offer samples of the interior and exterior elements of its cars. In Lucid’s case, the elements are modeled and named after different parts of California. In addition to actually seeing some of Lucid’s vehicles, visitors can sit in a virtual reality configurator for a demonstration of how the interior finishes and exterior color they are interested in will look when put together.
Lucid didn’t respond to several emails seeking a comment.
Its studio at the Short Hills mall is across from an Apple store, the kind of retail site that Tesla pioneered, according to Greenstone. Tesla’s strategy — and now that of other electric vehicle makers — was to open its galleries in upscale, high-traffic malls or streets near lifestyle brands such as Apple, Peloton and Lululemon, he said.
“When you go to Short Hills mall, you are paying for a billboard,” said Bill Read, an executive vice president at brokerage Retail Specialists.
Patrons of those retailers are more likely to be physically active and concerned about issues such as the environment and pollution, therefore more likely candidates to purchase an electric vehicle, Greenstone said. And they are often affluent, able to afford the price tags. Lucid’s luxury Air Grand Touring vehicle sells for $154,000, while Rivian’s R1T truck will set a buyer back $73,000.
These electric vehicle showrooms only have to be 2,500 to 4,000 square feet, big enough to display a couple of vehicles, he said. And in a mall setting, an electric car maker can easily have some vehicles parked outside in the lot for test drives, and it doesn’t have to have inventory in stock on-site, according to Greenstone.
Tesla has recently been moving away from mall locations, evolving its real estate strategy to lease large, vacant, free-standing retail sites for combined showrooms and service centers. For example, last week Wayne, New Jersey, granted approval for Tesla to take over a former Bloomingdale’s furniture outlet at 469 Route 46. Tesla plans to use the largest building at the site for vehicle service. A smaller building will incorporate a 3,120-square-foot showroom, with the rest of the building used to store vehicles awaiting pickup by customers.
Tesla didn’t respond to several emails seeking comment.
Tesla has 165 sites — showrooms and combined showroom-and-service centers — according to CoStar data. It has two locations that are 60,000 square feet and over, former department store boxes, said Brandon Svec, CoStar Group’s national director of retail analytics. The Tesla locations include 35 that are 30,000 to 38,000 square feet; 29 that are 10,000 to 20,000 square feet; and 27 that are 20,000 to 30,000 square feet. The automaker has 51 sites that are 1,000 to 5,000 square feet, according to CoStar.
Tesla is “keeping and renewing” stores at malls that are performing well, Greenstone said.
Retail expansion hasn’t been without its pullbacks by electric vehicle makers, with not only Tesla shuttering some mall showrooms during the past few years but Rivian dropping plans to open a showroom at 932 W. Randolph St. in the Fulton Market area of Chicago.
“The Randolph Street location is no longer in our plans, though we are still exploring our options in Chicago and look forward to sharing when the time is right,” Rivian spokewoman Miranda Jimenez said in an email, adding that the company has shifted its “physical footprint focus” to its service centers.
Rivian only operates one U.S. showroom, or “hub,” in Venice, California, which it opened in October.
“This space caters to anyone ranging from the EV-curious to Rivian pre-order holders and owners to families,” Jimenez said. “Visitors can come together to share and connect through the site’s offerings and programming. … The space is just over 3,500 square feet and emphasizes adaptive reuse as it was formerly the site of author Ray Bradbury’s private residence, an electric utility substation and an art gallery, at separate times. You’ll find a library, communal hall, two display vehicles and open-air spaces for adults and children alike on-site.”
Rivian has more than 20 service centers across the United States, in major cities such as Los Angeles and Chicago as well as smaller markets such as Olathe, Kansas, and Garfield Heights, Ohio.
But there’s still a swell of retail activity by electric vehicle makers, with newcomers beyond even VinFast and Lucid.
Faraday Future Intelligent Electric will also be establishing a foothold in the retail world in California. It will be opening what it calls a “flagship-brand experience center” at 464 N. Beverly Road in Beverly Hills. The company plans to debut its core vehicle, the FF 91, in the third quarter.
“In the near future, our cars will not only be in store windows but will also be on the streets of California and beyond, available to all who wish to experience this new species of the ultimate intelligent TechLuxury vehicle,” Carsten Breitfeld, global CEO of Faraday Future, said in a statement.
The company has received its dealer license from California, which allows it to sell directly to buyers in the state and to sell vehicles online to users outside of California. Its Beverly Hills center will feature a retail area, a sales lounge, a cafe, a virtual-reality experience, a co-creation lab and a VIP lounge, “making the in-store sales experience complementary to the driving experience of the FF 91,” according to Faraday Future.
Faraday has said it aims to have flagship showrooms in the largest 20 cities around the world, including New York, by 2025.
And Polestar aims to have 35 of its spaces across North America by the end of 2022, according to company spokesman Donny Nordlicht. Right now it has nearly 25.
“Our sales model is digital-first, but also includes teaming up with our space partners for the physical footprint,” Nordlicht said in an email. “Those partners are franchised retailers; we are not subject to any state laws regarding direct-sales as we do not sell direct to the customer.”
Polestar also has mall sites, including the Short Hills mall, where Lucid opened in February.