Tesla Rolls Back Some of Its Latest Price Cuts and Store Closures

Tesla Store Los Angeles

In a February 28 blog post on the Tesla website, it was stated that the electric-automaker would close most of its 378 stores worldwide. If Tesla had gone back on its promise of a $35,000 Model 3, even by a minor 3% increase of $1,050, it would have caused an uproar from consumers.

Electric carmaker Tesla has reversed a previous decision to close most of its stores and move to online-only sales in order to pass the savings along to customers.

Telsa notes that over the last two weeks it has closely evaluated all Tesla retail locations. 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.

On Sunday, Tesla changed course on previously announced plans to shift toward online-only sales, announcing it would keep "significantly more stores open". The auto firm is backtracking on its plans to close most of its stores worldwide after a period of evaluation.

Tesla updated that the current prices will stay only until March 18. Such a criticism could not be leveled at Tesla's now-closed store in Washington, DC, located in the city's newest and poshest downtown retail location; perhaps this store was one that suffered from "low apparent demand generation". The day after Tesla sent out invitations to the unveiling of the Model Y crossover, VP of Engineering Michael Schwekutsch announced his sudden departure. Another 20 percent of Tesla locations are under review, the company added.

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In brief: Tesla has backtracked on plans to close virtually all its stores following a move to an online-only sales model. They will keep a limited number of cars so that customers can drive away with a new vehicle immediately.

"The seemingly spontaneous yet dramatically altering strategic decisions (for a $US50 billion [$71 billion] market cap company) doesn't lend a lot of confidence, in our view". The Model S and Model X also will be made more expensive, and buyers will have a week to place orders before prices rise.

It's not clear if Tesla will increase just the base price of the vehicles, or if certain options will be subject to the price hike as well.

The talks come as Tesla looks to localize battery cell production and push forward with the 500,000-vehicle-capacity Shanghai plant, expected to be completed in May.

Tesla disclosed Monday in a government filing that it had shuttered 10 percent of its retail locations, but it is now reevaluating each of its stores. It's unclear how that applies to the company's local Australian operations, about which Tesla Australia will not comment.

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