Tesla to Raise Prices, Backtracks on Closing Most Stores

Tesla to Raise Prices, Backtracks on Closing Most Stores

Tesla to Raise Prices, Backtracks on Closing Most Stores

Tesla caused controversy in recent weeks announcing it would shut its stores and shift worldwide sales to online only. There won't be a price increase to the $35,000 version of the Model 3, though costlier variants will be made more expensive.

Musk, 47, described the store wind-down announced on February 28 as a cost-cutting move that enabled Tesla to offer a long-promised US$35,000 version of the Model 3 sedan, the automaker's first mass-market vehicle.

Less than a fortnight ago the electric auto maker said it was taking sales nearly entirely online in a move it said would reduce the cost of selling a vehicle by up to 6pc and help lower the cost of its cheapest auto, the Model 3, down to $35,000 (£26,700). Now, Tesla said, a few from the already-closed group in high-visibility spots will even be reopened.

'As a result Tesla will need to raise vehicle prices by about 3 percent on average worldwide'.

Tesla said the increase is to cover the cost of keeping more of its physical stores open.

In a statement on Sunday, the auto maker said potential buyers can place orders until March 18 at the old prices. Traditional test drives will still be available at stores, which the firm said will also keep a small stock of cars for customers who wish to drive one away immediately.

In the early hours of Monday morning, Tesla employees got a surprising email from CEO Elon Musk. Another 20 percent of store locations are under review and have won a reprieve for "the next few months".

Before last week's closures, Tesla had 378 stores and service locations worldwide, including 23 outlets in the United Kingdom and Ireland, comprising 18 stores and five service centres.

To be clear, all sales worldwide will still be done online, in that potential Tesla owners coming in to stores will simply be shown how to order a Tesla on their phone in a few minutes. Some stores will also have a small number of cars available for immediate delivery.

Also Monday, a NY attorney announced that Tesla's former chief of security has filed a whistleblower complaint with the U.S. Securities and Exchange Commission. Physical stores will have a small selection for customers who want to test drive a auto or drive one off the lot immediately. 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.

There are just days to go before the newest all-electric SUV made by electric auto pioneer Tesla, the Model Y, is introduced to the world.

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