Published: Tue, March 12, 2019
Money | By Ralph Mccoy

Tesla Is Keeping Its Stores Open, But Increasing Prices To Do It

Tesla Is Keeping Its Stores Open, But Increasing Prices To Do It

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

Tesla is in the process of reviewing the performance of its stores, both in terms of sales and foot traffic, to determine which will stay open.

The electric vehicle maker said in a statement late Sunday that prices for most models worldwide would go up by about 3% after it chose to "keep significantly more stores open than previously announced".

The 3% price increases announced Sunday will apply to the more expensive editions of the Model 3, as well as the Model S sedan and Model X crossover. Now, in a blog post, the company has announced that it's not quite done with physical stores after all.

Tesla says the move will allow it to keep open more of its Tesla stores than previously planned.

In brief: Tesla has backtracked on plans to close virtually all its stores following a move to an online-only sales model.

Tesla has reversed its decision to close its brick-and-mortar stores and take sales online only.

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Despite keeping more stores open, Tesla will still use an online only sales model worldwide, with all auto sold with a seven-day or 1000-mile return policy. It's raising prices instead-on all but the Standard Range Model 3.

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

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. 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.

Since New Year's, Tesla has announced three rounds of price cuts on all its models, including $2,000 in January, $1,100 in February, and $8,000 to $13,000 March 4.

"A few stores in high visibility locations that were closed due to low throughput will be reopened, but with a smaller Tesla crew", the company said".

Anyone who was considering buying a in the near future has only one week to lock in the current pricing. And the generous return policy of 1000 miles or 7 days, whichever comes first, should alleviate the need for most test drives.

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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