Elon Musk shoots down US regulator's complaint about his Tesla tweet

Elon Musk shoots down US regulator's complaint about his Tesla tweet

On Sunday, Tesla changed course on previously announced plans to shift toward online-only sales, announcing it would keep "significantly more stores open".

To soften the blow of the initial announcement, the company used projected savings to reduce prices across its range by around six per cent, while some models in Australia had prices slashed by around $80,000. It also confirmed that to afford selling the new model at this price it would need to close most of its brick and mortar stores over the next few months.

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

Tesla said it would close the stores in order to be able sell its EVs more cheaply, but the WSJ pointed out that Tesla would still be on the hook for $1.6 billion worth of leases. Instead, they visit to see sales models and take test drives, before finishing the deed online.Tesla's one New York City showroom is in Manhattan's Meatpacking District at 860 Washington Street.

"Unfortunately, there's no way around it", said Tesla CEO Elon Musk in a conference call.

A few stores in high-visibility locations that were closed because of low throughput would be reopened with a smaller Tesla crew and would carry fewer cars in inventory.

Tesla has been making efforts to cut costs.

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But Musk's lawyers argued on Monday that the tweet complied with the company's communication policy for senior executives and that the US Securities and Exchange Commission's request that Musk be held in civil contempt is incorrect on the facts and on the law.

Separately, a NY attorney on Monday announced that Tesla's former chief of security has filed a whistleblower complaint with the U.S. Securities and Exchange Commission. The tweets initiated an investigation into whether Musk sent the tweets to inflate Tesla's stock price.

Tesla was down 0.54%, trading near $282.60 a share early Monday, after the company hit the brakes on its plan to shutter its retail stores.

In announcing the move on February 28, CEO Elon Musk said it was necessary to cut costs in order to profitably sell the mass-market version of the Model 3 sedan for $35,000. Given The Economist Intelligence Unit is forecasting consumer price inflation of 2.2% in the U.S., this is less than a 1% increase in real terms.

Justin Hammond, who bought a Model S 75D just eight week prior to the cost reductions branded the move as "terrible" and said he no longer trusted the brand.

Tesla spokeswoman Emily Findlay also said there is nothing more to add beyond what the blog post had mentioned.

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