Tesla changes tack: More stores to remain open, prices rise to compensate

Tesla changes tack: More stores to remain open, prices rise to compensate

Tesla changes tack: More stores to remain open, prices rise to compensate

Tesla has backflipped on plans to move all sales of its electric vehicles online, announcing that it has chose to keep "significantly more" retail outlets open, and pay for this by raising its auto prices by around 3 per cent worldwide.

But he also said the move to close 10 percent of stores and evaluate others is the right thing to do, and said most retail companies do that all of the time.

Tesla also made a decision to retain some of the physical stores it had planned to close and will reopen some of the closed retail centers.

Tesla Model 3 finally available but it will only sell online Tesla to slash sales force now that the Model 3 electric vehicle is finally ready to order. The retail locations also will carry inventory of vehicles for test drives and for immediate purchases.

The electric car-maker revealed it was backing off its plan to close all of its USA stores in a blog post on Monday.

Until recently, Tesla's store strategy seemed to be one of expansion.

Last year, the SEC opened an investigation into Tesla and Musk after he tweeted that he planned to take Tesla private and already had the financing to do it - an assertion that proved false but nonetheless made investors who bet against the company lose millions. Pricing will increase by about 3% globally.

The move comes days after Tesla's announcement to sell cars on an online-only platform to help save costs.

Tesla will raise the price of all its cars, with the exception of the new entry-level Model 3 Standard, by "an average" of 3% worldwide. The 7-day/1,000 mile test drive policy will still apply as well, though test drives will still be available in stores.

A Tesla spokesman declined comment Monday beyond the company's statement.

Tesla announced on Sunday that it is reversing course on a plan to close all of its brick and mortar retail locations.

He said the sooner-than-expected arrival of a US$35,000 Model 3 likely reflected the need to replenish cash after paying off a US$920 million convertible bond and added that weak USA sales early this year also probably hasn't helped. The company hasn't yet clarified why it partly reversed its initial decision, but Engadget has reached out for more information. Sales of the Model 3 have fallen almost 80 percent since that time.

"Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected", Tesla said at the end of February. Tesla CEO Elon Musk has struggled to lead the company to consistent profitability.

Related news