Tesla continues its shift toward online-only sales, but now says it won't close as many brick-and-mortar stores as originally thought.
FILE- In this July 6, 2018, file photo prospective customers confer with sales associates as a Model 3 sits on display in a Tesla showroom in the Cherry Creek Mall in Denver. Tesla is walking back its plan to close most retail stores worldwide in a move the company says will force it to raise prices on most of its electric vehicles. The company still will move to online-only sales, but now says it won't close as many stores as originally thought.
The $35,000 base Model 3 will still be available, but the company is raising prices by 3 percent on all other models. “As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3 percent on average worldwide,” a company’s statement said. “We will only close about half as many stores, but the cost savings are therefore only about half.”
The reversal shows that Tesla had second thoughts about shuttering the stores and whether buyers would make such a large purchase without a test drive. The company says it still plans to offer buyers the ability to return purchased vehicles at no cost after a seven-day or 1,000 mile test drive. Musk probably realized that he was locked into long-term leases on the stores that he would have to pay regardless of whether they were closed, Ramsey said.
In announcing the move on Feb. 28, CEO Elon Musk said it was necessary to cut costs in order to profitably sell the mass-market version of the Model 3 sedan for $35,000. That’s a price point needed to reach more consumers and generate the sales that the company needs to survive, Musk has said.“This is the only way to achieve the savings for this car and be financially sustainable,” Musk told reporters during a conference call announcing the change.
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