Tesla walks back its plan to close most showrooms

Tesla Changes Its Mind Over Store Closures, Raises Prices By 3%

Tesla backtracks on decision to close stores, raising prices instead

Musk blindsided many sales personnel at the company with the store closings, and some investors and analysts feared the cost-cutting measures sent troubling signals about the state of the company's sales and cash position. There will be no price increase to the $35,000 Model 3.

Tesla will raise the price of its vehicles after going back on a recent decision to close most of its stores.

"Depending on their effectiveness over the next few months, some will be closed and some will remain open", the statement said. Musk described the winding down of many stores as a cost-cutting move that enables Tesla to offer a long-promised US$35,000 version of the Model 3 sedan, the automaker's first mass-market vehicle.

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.

Cost savings from store closures will now be only about half the expected amount, Tesla said, as the company will shut half the number of stores it had originally planned. Yesterday's news softens the blow to employees, but with the lingering uncertainty about whether or not their store is one of the 20% that could still possibly close.

Despite this possible reprieve for the thousands of retail workers at Tesla, Musk's email and the blog post state that sales will remain online only, and that the stores will exist just to show people how to order a vehicle "on their phone in a few minutes".

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Analysts say the company's sudden reversal of plans adds to investor concerns that it lacks a cohesive strategy for growing into a major global automaker.

Musk was required as part of a settlement reached with the SEC past year - over "misleading" tweeted claims about having secured funding to take the company private - to have social media posts containing material content approved before sending them. The stores will keep a small inventory on hand for people who want to drive away immediately.

Tesla is an electric vehicle and energy company based in Palo Alto, California, that is worth about $49 billion.

"Most Tesla cars are already pitched towards the higher end of the market, where buyers are less price sensitive".

However, there will be no price hike for the cheapest Model 3, which is its cheapest vehicle with a starting price of $35,000 in the USA, around £26,400 in the United Kingdom - although prices for Britain are yet to be confirmed. Buyers coming into stores will be able to do a test drive, and if they choose to buy a auto, they'll be shown how to do that on their phones. The company did emphasize that all sales would still be online only-salespeople will show customers how to order vehicles via an app.

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