Tesla to raise prices, backtracks on closing most stores

Tesla store downtown Washington D.C

As part of the plan, customers will instead have to buy Tesla vehicles online or by phone rather than in person at one of its hundreds of retail outlets. Most of the company's 378 stores and services centers will stay open.

In its blog post announcing the change, Tesla said that, "we have made a decision to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months".

The hike will not affect Tesla's base Model 3, which $35,000 price tag makes it the most affordable of Tesla's lineup. The company also announced that it would be closing almost all of its stores and that the Model S and Model X would also see some slight price reductions.

Less than two weeks after it announced it would be closing the majority of its retail locations, Tesla has made a blog post revisiting that decision.

Despite the about-face, the company claims it is still moving to an online-only sales model, with store staff instructing buyers how to purchase their new auto online.

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Tesla also suggested a brick-and-mortar retail strategy was important in its annual report filed February 19, just nine days before Musk announced the pivot to online sales. According to CNBC, which received a copy of the email, Musk wrote that the company would now be keeping many of its unclosed stores open, and would even reopen some of the now-shuttered locations. InsideEVs, a publication close to Tesla, tracks USA electric vehicle deliveries and according to its numbers, January and February deliveries were down by around 80 percent compared to the months leading up. It will now raise vehicle prices by about 3 percent worldwide. The plan is a partial reversal of the announcement that surprised investors and company fans alike.

Potential Tesla owners will have a week to place their order before prices rise, so current prices are valid until March 18th. Stores will also carry a small number of cars in inventory for customers who wish to drive away with a Tesla immediately.

"A few stores in high visibility locations that were closed due to low throughput will be reopened, but with a smaller Tesla crew". The 7-day/1,000 mile test drive policy will still apply as well, though test drives will still be available in stores. Buyers coming into stores will be able to do a test drive, and if they choose to buy a vehicle, they'll be shown how to do that on their phones.

The most likely explanation for this demand drop, over and above seasonality, is that Tesla did everything it possibly could to pull sales into Q4 in order to qualify the maximum number of buyers for expiring EV tax credits.

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