Tesla will raise the price of its vehicles after going back on a recent decision to close most of its stores. 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.
The company said that the 10% of stores it had recently closed weren't performing and would've been closed anyway. Some of the stores that have already closed will be reopened with fewer staff members.
American electric vehicle maker Tesla has raised auto prices by an average 3 percent, worldwide.
Elon Musk is backtracking from a jarring change in Tesla Inc.'s retailing strategy, keeping numerous company's stores open and raising the prices of its electric cars as a result.
It will now close "about half as many" stores - making half the cost savings.
While it is as yet unknown if the Model Y will be made immediately available in the base version, it is known that there will be a mix of the shorter range base Model 3 and higher range and spec'd models being produced at the same time at Tesla's Fremont auto factory. In January CEO Elon Musk announced that it is cutting down 7 percent of its 45,000-strong workforce.
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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. As a result, the company will increase vehicle prices by about 3% on average, globally.
Tesla justified online ordering saying that its generous return policy will compensate test drives as buyers can return a vehicle with seven days or 1,000 miles.
Tesla has 378 stores and service centers worldwide.
But he also said the move to close 10 per cent of stores and evaluate others is the right thing to do, and said most retail companies do that all of the time.
Shares of Tesla edged up less than 1 per cent in trading early Monday.
The blog post doesn't give a rationale for why Tesla is backpedaling.
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.