Tesla Abandons Last Week's Decision to Close Stores, Will Increase Prices Instead

Tesla Changes Its Mind Over Store Closures, Raises Prices By 3%

Tesla Changes Its Mind Over Store Closures, Raises Prices By 3%

Last month, the electric-car maker announced it was shifting to online-only sales and closing most of its 378 retail stores.

Musk has promised a $35,000 price tag for the Model 3 since the vehicle was first unveiled in 2016.

The carmaker took the decision to keep more stores open after a long review of "every single Tesla retail location", said a blog post of the brand.

On February 19, he tweeted that Tesla would make 500,000 cars in 2019 - up from the 400,000 that the company had estimated until then, as it grapples with production problems with the Model 3.

Tesla has pulled a U-turn on plans to close nearly all of its dealerships while announcing price rises for its more expensive cars. "We will only close about half as many stores, but the cost savings are therefore only about half".

The increased pricing will be introduced after March 18, so potential buyers have a week left to lock in a Tesla with the current pricing.

Musk had until the end of the day Monday to respond to an accusation by the Securities and Exchange Commission that he violated terms of a court-endorsed deal between him and the regulatory agency stating that he should avoid sending any tweet that could affect the price of Tesla shares.

At the end of a year ago, the company had almost 400 showrooms across the country, but has closed about 10 percent of those with the worst performance.

Tesla recently closed 10 percent of sales locations, which are remaining closed as they didn't receive enough foot traffic.

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

Remaining stores could have fewer workers but will have vehicles available for test drives and a small inventory in case people want to buy immediately, the statement said.

The price cut announced by Tesla previously was categorised as "around 6%".

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.

Tesla's acquisition of Central Valley Transport's trucks will help the company optimize the delivery of its vehicles.

The blog said that sales would be made online only and that drivers would not need test drives as they could return the vehicle within a week or before driving 1,000 miles, whichever came first.

Still, Tesla shares were largely unaffected, with the stock gaining 3 per cent on Monday to $US290 a share, maintaining its market value at more than $US50 billion, much to the chagrin of the army of "short-sellers" who are betting on the company failing.

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