Tesla turns around raising prices, keeping more stores open

Kenny Grant
March 11, 2019

Earlier this month Tesla announced that it would be closing the majority of its brick and mortar stores worldwide in order to afford the $US35,000 price tag on the new Model 3, as well as keep the company "financially sustainable". "Unfortunately, there's no way around it", said Tesla CEO Elon Musk in a conference call.

The price hike won't apply to its much-anticipated $35,000 Model 3 (getting this to market was the reason for the original closure plan) and won't come into effect until March 18 - so you still have a week to get your order in if you've been mulling it over.

However, amid recent store closures and related staffing cuts, Tesla announced on Monday that it has made a decision to reopen some stores that are in high visibility areas.

"As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% on average worldwide", the company said. However, several high-visibility locations that it closed will reopen "with a smaller Tesla crew", it said.

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Pricing and specifications are under wraps until the Model Y is launched later this week, but Musk has indicated that it will be priced around 10 per cent dearer than the Model 3.

It will now close "about half as many" stores - making half the cost savings. It added that the future of another 20% of locations will be under review in the next few months.

Musk on February 19 tweeted to his more than 24 million Twitter followers that Tesla would make around 500,000 cars in 2019. Tesla says that stores will cary a "small number" of cars in inventory so that some buyers can drive away in a Tesla right away.

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