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

Jeannie Matthews
March 13, 2019

The company previously announced that February 28th as the deadline to shut the stores to shift entirely into online sales.

Tesla will increase the cost of its vehicles by an average of about 3 per cent after rethinking a plan announced just 10 days earlier to wind down all but a small number of its stores.

"While the reversal to keep stores open does call into question the soundness of the initial decision, we view this as the right course of action and think that test drives are still an important part of the sales process until the electric vehicle penetration rates increase meaningfully".

"Depending on their effectiveness over the next few months, some will be closed and some will remain open", the statement said.

Musk highlighted the importance of logistics once more in a tweet on November, when he noted that Tesla is buying trucking companies to shorten Model 3 delivery times and ensure that orders for the electric sedan will be accomplished before the end of the year.

Tesla has backed off a plan to close all its US stores and said it will instead raise prices of its higher-end vehicles by about 3 percent on average. Musk did not specify how many stores would close, or how many jobs would be lost as a result.

On Sunday, however, the company said it would reduce the number of retail store closures.

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However, it did not state which of the 378 stores and service locations around the world it would close. Tesla will offer vehicles for test drives at its stores at the buyer's request, and there will be a small number of cars in inventory for those who want to drive off in their new auto the same day.

It is worth noting, that the price hike will not impact the $35,000 base Model 3, only more expensive Model 3 trims, the Model S, and the Model X. We think this was a smart decision in order to avoid consumer backlash.

Recently, though, Tesla seems to be somewhat prone to waffling as opposed to sticking with a coherent game plan.

Tesla is an electric vehicle and energy company based in Palo Alto, California, that is worth about $49 billion.

Tesla cut the prices in response to falling tax incentives for its cars, after the company reached the cap on the credits last summer.

The talks come as Tesla looks to localize battery cell production and push forward with the 500,000-vehicle-capacity Shanghai plant, expected to be completed in May. The ones that remain open will act as information hubs for potential buyers, but will also carry cars in their inventory to be used for test drives and even sales. The email to employees was also followed by a public-facing blog post.

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