Tesla pulls a U-turn on dealer closures but raises prices

Tesla pulls a U-turn on dealer closures but raises prices

Tesla pulls a U-turn on dealer closures but raises prices

The electric vehicle manufacturer announced February 28 that it was planning on closing nearly all of its physical stores and switching to a purely online sales model, Business Insider reported. There won't be a price increase to the US$35,000 Model 3.

Tesla announced on Sunday that it is reversing course on a plan to close all of its brick and mortar retail locations.

The news reads more like a stay of execution than a pardon, but surely comes as welcome news to the thousands of retail employees staffing its stores around the world that were left not knowing if they would even have jobs in the coming days or weeks after the company made a decision to close most of its stores.

As of today, Tesla says it "will only close about half as many stores, but the cost savings are therefore only about half".

In addition, Tesla added, another 20% of its locations are under review, and depending on their effectiveness over the next few months, some will be closed and some will remain open.

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.

"Going forward, Tesla does have another (short-term) marketing tool to close the quarter: order now before the March 18th price increases". The company said that the 10% of stores it had recently closed weren't performing and would've been closed anyway.

Tesla has suggested it will roll back at least a portion of the massive cuts it made to driveaway pricing of its Model S and Model X.

Tesla has 378 stores and service centers worldwide.

Tesla said that sales would still be conducted online with potential buyers "coming in to stores will".

Tesla also announced Monday that it had purchased car-hauling trucks and trailers from a California company in a stock deal worth about $14.2 million.

As a result of keeping these additional stores open the electric carmaker has stated that prices are expected to rise by "about three per cent on average worldwide". Social media posts from Tesla workers show that even the company's executives were helping out in delivering Model 3s. Price increases will only apply to more expensive Model 3, Model S, and Model X vehicles.

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

Online will remain as the company's sole sales channel, but stores will still have vehicles available for test driving.

Like a speeding sports auto executing a hairpin turn, the company veered abruptly on Sunday, backtracking on an earlier announcement from just a week and a half ago that it would soon close all of its retail stores.

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