Tesla says it'll keep more stores open and raise vehicle prices

Kenny Grant
March 12, 2019

The move does not affect Tesla's decision to move all purchases onto the internet, as the stores will simply shift to a policy of helping customers with their online purchases.

Tesla now claims it will only be closing stores that it would have already meant to close, no matter what.

Tesla has backed off a plan to close all its USA stores and will instead raise prices of its higher-end vehicles by about 3 percent on average.

In a blog post, Tesla said it would keep "significantly more stores open than previously announced", and support the ability to produce the base-level $35,000 Model 3 by raising prices about 3 percent on other, higher-end models.

The carmaker said the 3% price rise would not apply to the new mid-market Model 3. The company also announced that it would be closing almost all of its stores and that the Model S and Model X would also see some slight price reductions. Less than two weeks after announcing that he was closing the company's retail stores and letting go the sales staff, it was time for an about turn.

On February 28, Tesla said that the long-awaited US$35,000 Model 3 was now available, but in order to "remain financially sustainable", the EV maker was shifting sales worldwide to online sales only, meaning it would be closing down stores.

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Because many states mandate that only dealers, not manufacturers, can sell cars in stores, Tesla customers don't technically close the deal at the showroom.

As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% on average worldwide.

The global price hike will come into force on March 18, so if you've been considering splashing on a Tesla then you still have a week to make the most of current prices.

Cost savings from store closures will now be only about half the expected amount, Tesla said, as the company will shut half the number of stores it had originally planned.

Other than that, Tesla is not giving much away: accompanying the invitation is a high contrast image of the front profile of the electric SUV, which appears (rightly so) to have a higher roof than the Model 3. Sales of the Model 3 have fallen almost 80 percent since that time. And whether those numbers are directly involved or not, the company changed course, announcing late Sunday that it's not happening in such a sudden and comprehensive way. Though the company noted that most orders occur through the Tesla website, that's probably a function of eager Tesla buyers willing to pull the trigger with not so much as a test drive.

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