Tesla changes plans and will keep more stores open

Share

In its blog post announcing the change, Tesla said that, "we have chose to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months".

Ten days after Tesla said that it would close nearly all of its stores, the carmaker has reversed its decision and will be raising the price of its electric vehicles instead.

In a post on the company's website, the automaker stated it has now "decided to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months".

Electric carmaker Tesla has reversed a previous decision to close most of its stores and move to online-only sales in order to pass the savings along to customers. Physical stores will have a small selection for customers who want to test drive a auto or drive one off the lot immediately.

A small number of vehicles will be kept in inventory for customers who wish to drive away with a Tesla immediately.

Tesla said the worldwide price increases would apply to the more expensive versions of the Model 3, Model S and Model X, and that there will be no price increase to the $35,000 Model 3.

In this June 14, 2018, file photo, Tesla CEO Elon Musk speaks at a news conference in Chicago.

More news: German minister hails Macrons plan for ‘European renaissance

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. The Model 3 has not yet gone on sale in the United Kingdom, so final pricing has yet to be decided.

The move comes days after Tesla's announcement to sell cars on an online-only platform to help save costs. Although Tesla said it would concentrate on making up volume in Europe and China, neither of those markets appear able to take up the US' slack.

As part of that settlement, Musk stepped down as the company's chairman and he and Tesla agreed to pay $20 million each in fines. Musk did not specify how many stores would close, or how many jobs would be lost as a result. The policy allows new buyers to drive the vehicle for 1000 miles or seven days.

Tesla was down 0.54%, trading near $282.60 a share early Monday, after the company hit the brakes on its plan to shutter its retail stores.

A Tesla spokesman declined comment Monday beyond the company's statement. Given The Economist Intelligence Unit is forecasting consumer price inflation of 2.2% in the United States, this is less than a 1% increase in real terms.

However, the long-promised $US35,000 Model 3 will not be impacted by the increase.

In addition to the e-mail to all employees, Tesla also published a blog post Sunday night, conveying these details to shareholders and the general public.

Share