Tesla to raise prices, backtracks on closing most stores

Tuesday, 12 Mar, 2019

Tesla just took to its official blog to announce that it would not be closing as many stores as it had initially planned and would be raising prices 3% on select configurations of the Model 3, S, and X, effective March 18th. Tesla has stated that only the most expensive variants of the Model 3, S and X will be impacted. And prices for the Model 3 will still fall, as Tesla promised earlier this month, confirming this car's position as the affordable entry model for the range. According to CNBC, which received a copy of the email, Musk wrote that the company would now be keeping many of its unclosed stores open, and would even reopen some of the now-shuttered locations.

Despite keeping more stores open, Tesla will still use an online only sales model worldwide, with all vehicle sold with a seven-day or 1000-mile return policy.

Less than two weeks after announcing a plan to shift all of its sales online in effort to cut costs, Tesla now says it will keep physical stores open and instead raise the prices of a slew of its vehicles.

The carmaker has confirmed that the price rises will become effective from March 18th. Tesla CEO Elon Musk has struggled to lead the company to consistent profitability.

CleanTechnica spoke to several retail store employees after the news of Tesla closing retail stores went out and the sentiment was universally unsettled. The company said that the 10% of stores it had recently closed weren't performing and would've been closed anyway.

All Tesla sales will still be conducted online, and the showrooms will remain to show clients how to order a Tesla on their phone.

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 day after Tesla sent out invitations to the unveiling of the Model Y crossover, VP of Engineering Michael Schwekutsch announced his sudden departure.

Tesla also suggested a brick-and-mortar retail strategy was important in its annual report filed February 19, just nine days before Musk announced the pivot to online sales.

To make up for this, Tesla will raise the prices of its high-end vehicles by about 3 percent on average, as it strives for profitability. And the generous return policy of 1000 miles or 7 days, whichever comes first, should alleviate the need for most test drives.

Shares of Tesla Inc. edged up less than 1 percent in Monday trading.

Other than that, Tesla is not giving much away: accompanying the invitation is a high contrast image of the front profile of the electric SUV, which appears (rightly so) to have a higher roof than the Model 3.