Tesla changes tack: More stores to remain open, prices rise to compensate

Tesla changes tack: More stores to remain open, prices rise to compensate

The electric auto maker's efforts to improve its delivery processes was highlighted in the third quarter of 2018, at a time when Tesla was just getting the hang of producing the Model 3 at scale.

Tesla just took to its official blog to announce that it would not be closing as many stores as it had initially planned and would be raising prices 3% on select configurations of the Model 3, S, and X, effective March 18th.

Tesla had said less than two weeks ago that it would begin shutting most of its stores in a cost-cutting move created to help reduce the price of its bestselling vehicle, the Model 3, to as low as $35,000.

In a statement on its website late on Sunday (US time), Tesla said that after close evaluation of "every single Tesla retail location", it has chose to keep significantly more open than previously announced. Following that review, some more stores will close, and others will remain open, the company said.

To keep the lights on, Tesla notes that it will need to raise prices on all Models, with the exception of the low-margin Model 3's $35,000 Standard Range variant.

When CEO Elon Musk announced the debut of the base, $35,000 Model 3, he said it was only possible by achieving cost savings by closing stores and laying off their employees.

The global price hike will come into force on March 18, so if you've been considering splashing on a Tesla then you still have a week to make the most of current prices. "These are stores that we would have closed anyway, even if in-store sales made up our entire sales model", the company said. The plan is a partial reversal of the announcement that surprised investors and company fans alike.

According to Tesla's blog, the preference for conducting sales online will continue and said buyers in stores would be trained to order a Tesla on phone, which is a rapid process.

Recently, though, Tesla seems to be somewhat prone to waffling as opposed to sticking with a coherent game plan.

Remaining stores could have fewer workers but will have vehicles available for test drives and a small inventory in case people want to buy immediately, the statement said.

Tesla also announced Monday that it has purchased car-hauling trucks and trailers from a California company in a stock deal worth about $14.2 million.

Tesla's acquisition of Central Valley Transport's trucks will help the company optimize the delivery of its vehicles. Social media posts from Tesla workers show that even the company's executives were helping out in delivering Model 3s.

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.

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