Tesla will keep stores open, vehicle price increase coming after March 18

Irving Hamilton
March 12, 2019

Tesla said last month after announcing a price cut for its flagship Model 3 vehicle that it would shutter most stores in a bid to cut costs and shift more of its sales online.

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.

Its launch date was announced last week by Tesla CEO and founder Elon Musk following the warmly welcomed, $US35,000 ($A49,750 at today's rates) base model of the all-electric Model 3 sedan. The company will evaluate the performance of approximately 20% store locations over the next few months before determining if they should remain open or close. It has decided after that evaluation that it will keep "significantly more" stores open than it had planned. 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.

Tesla's PR notes that all vehicles sales will still be conducted online, though it also states that a small number of vehicles will be on-hand for immediate purchase. The price increases will only apply to the more expensive variants of Model 3, as well as Model S and X.

Like a speeding sports vehicle executing a hairpin turn, the company veered abruptly on Sunday, backtracking on an earlier announcement from just a week and a half ago that it would soon close all of its retail stores.

Tesla Model 3 and X cars charging in an underground parking lot next to a Tesla store in San Diego, California, U.S., May 30, 2018.

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The carmaker had claimed complete transition to online sales would allow it to slash prices by 6 percent, and that is how the company would sustain sale of the $35,000 Model 3.

CleanTechnica spoke to several retail store employees after the news of Tesla closing retail stores went out and the sentiment was universally unsettled.

The internal e-mail Musk sent on Sunday may help calm those who remained at Tesla after lay-offs in January, and ongoing job cuts after that.

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. And the generous return policy of 1000 miles or 7 days, whichever comes first, should alleviate the need for most test drives. It called for Tesla's general counsel and a newly designated in-house securities law attorney to pre-approve any written statements about Tesla that could be material. As a result of that decision, the company says it will have to increases prices on most of its models.

The company has now published a blog post which backflipped on this decision.

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