Tesla Backtracks On Closing Stores


Tesla is backtracking on its earlier plans to close stores while raising the prices on its electric vehicles.

Last month, the electric vehicle manufacturer announced that it would be winding down many of its North American stores and moving to online-only sales of its vehicles, a move that would see a drop in price for some of its vehicles.

Now those plans are being significantly rethought.

In a release, Tesla announced that after closely evaluating every single Tesla retail location, “we have decided to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months.”

Some 10 per cent of the company’s sale locations have closed, but these were locations “that didn’t invite the natural foot traffic our stores have always been designed for. These are stores that we would have closed anyway, even if in-store sales made up our entire sales model. A few stores in high visibility locations that were closed due to low throughput will be reopened, but with a smaller Tesla crew. In addition, there are another 20 per cent of locations that are under review, and depending on their effectiveness over the next few months, some will be closed and some will remain open.”

The result of this change in direction means that the drop in vehicle prices will now become an increase.

“As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about three per cent on average worldwide. In other words, we will only close about half as many stores, but the cost savings are therefore only about half. Potential Tesla owners will have a week to place their order before prices rise, so current prices are valid until March 18th. There will be no price increase to the $35,000 Model 3. The price increases will only apply to the more expensive variants of Model 3, as well as Model S and X.”

Stores will also carry a small number of cars in inventory.