Tesla Abandons Last Week's Decision to Close Stores, Will Increase Prices Instead

Tesla Abandons Last Week's Decision to Close Stores, Will Increase Prices Instead

It's unclear how many stores Tesla will keep open, exactly, and where.

Cost savings from store closing will be only about half the expected amount as the company will close only half the number of stores planned, it said. Purchases will still be done online, with Tesla store sales associates showing prospects how to purchase using the mobile app. Tesla adds that the seven day/1,000 mile return policy should eliminate the need for test drives in most cases, but "cars will still be available for test drives at stores at the potential Tesla owner's request". After that, the hike will take effect.

Other than that, Tesla is not giving much away: accompanying the invitation is a high contrast image of the front profile of the electric SUV, which appears (rightly so) to have a higher roof than the Model 3.

Musk has promised a $35,000 price tag for the Model 3 since the auto was first unveiled in 2016.

In statement, the company said that 10 percent of sales locations were closed in areas where they didn't invite the natural foot traffic they were designed for. According to the blog, "these are stores that would have closed anyway".

However, amid recent store closures and related staffing cuts, Tesla announced on Monday that it has chose to reopen some stores that are in high visibility areas.

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The silver lining: This will happen for all vehicles except the $35,000 Model 3.

In a blog post late Sunday, Elon Musk's electric-car outfit said it had made a decision 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".

At the time, Musk also walked back the company's guidance that it would be profitable in all future quarters, saying it would post a loss in the first quarter of this year.

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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 other words, Tesla is keeping more stores open with fewer employees, and hoping customers will do the work that the extra sales staff would previously have done. "It makes it seem like Tesla is making decisions on the fly and reacting to very short-term factors".

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