Tesla to increase vehicle prices, keep more stores open

Gladys Abbott
March 11, 2019

The update follows Tesla's recent announcement that it would be shifting to an online-only sales model and closing many of its stores as a cost-cutting measure to support the new $35,000 Model 3.

In a blog post late Sunday, Elon Musk's electric-car outfit said it had chose to keep "significantly more" stores open than planned, and will even reopen "a few stores in high visibility locations that were closed due to low throughput...but with a smaller Tesla crew".

Tesla plans to raise average vehicle prices by about 3 per cent globally after it reversed a decision to shut down most of its stores.

Tesla says the move will allow it to keep open more of its Tesla stores than previously planned.

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

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While the teaser itself doesn't reveal a whole lot about the Model Y, it does show that its headlights will more closely resemble those of the Model 3 than the larger Model S sedan and Model X SUV.

Despite this possible reprieve for the thousands of retail workers at Tesla, Musk's email and the blog post state that sales will remain online only, and that the stores will exist just to show people how to order a auto "on their phone in a few minutes". In a blog post, the company said about half the locations it was planning to close will stay open. Last week, the Wall Street Journal reported that most of Tesla's retail landlords had been given no notice as to the termination of leases, many of which had no cancellation clauses, thus exposing the company to a host of potential lawsuits.

That's good news for most of Tesla's sales staff, but not for new customers, who will pay the price for keeping the stores open.

The company will be sticking with some tried-and-tested elements of physical vehicle sales: cars will still be available for test drives at stores, and the shops will also carry a small number of cars in inventory for customers who wish to drive away a Tesla immediately.

Tesla has walked back on its decision to close most of its stores in order to save costs, announced two weeks ago. Overall, it will only be shuttering half as many stores as it was going to. According to the blog, "these are stores that would have closed anyway". There won't be a price increase to the US$35,000 Model 3. Another 20 percent of stores are still under review and may close over the coming months, depending on their effectiveness. The retail locations also will carry inventory of vehicles for test drives and for immediate purchases.

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