Tesla Reverses Course on Store Closures, Raises Prices to Compensate

Tesla hits brakes on retail store closures, will raise prices instead

Tesla will raise prices and backtrack on closing most of its stores

Tesla says that since its announcement two weeks ago, it has closed 10 percent of its sales locations, specifically targeting locations that didn't invite "natural foot traffic", some of which were destined for closure even if a company-wide restructuring wasn't ordered. The only vehicle that will not rise in price is Tesla's cheapest product, the $35,000 (£26,279) Model 3, which the company finally made available as part of the price cut after years of promises. 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. The company didn't specify on Sunday how many of these it still planned to close or in which markets.

"In addition, there are another 20% of locations that are under review, and depending on their effectiveness over the next few months, some will be closed and some will remain open".

Tesla Inc. said it plans to raise average vehicle prices by about 3 percent globally after reversing a decision to shut down most of its stores.

The company gave no numbers, but said it would close only about half the stores that it had meant to.

The increased pricing will be introduced after March 18, so potential buyers have a week left to lock in a Tesla with the current pricing.

Tesla cut the prices in response to falling tax incentives for its cars, after the company reached the cap on the credits last summer.

In its blog post, Tesla said it's sticking to plans for all sales to be done online, with more thinly staffed stores playing the role of coaching consumers on how to order cars on their phones.

Tesla was expected to further reduce the price of Model S and Model X after realizing a 5-6% cost reduction from its transition to online-only sales.

Fox News senior judicial analyst Judge Andrew Napolitano on Tesla CEO Elon Musk's Twitter fight in court and the legalization of marijuana in states across the country. Before the $35,000 Model 3 was available, the cheapest Tesla started at $42,900.

"The fact that the Tesla's vehicle prices are going up by 3% is not worrying in itself".

Tesla said the worldwide price increases would apply to the more expensive versions of the Model 3, Model S and Model X, and that there will be no price increase to the $35,000 Model 3.

The company earlier announced a switch to online-only sales in hopes of cutting costs while boosting demand and the firm's stock price as it had a billion-dollar debt payment to make. Physical stores will have a small selection for customers who want to test drive a vehicle or drive one off the lot immediately.

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