Tesla to Raise Prices, Backtracks on Closing Most Stores

Share

It has decided after that evaluation that it will keep "significantly more" stores open than it had planned.

The latest announcement reverses those price cuts and most of the store closings.

At the end of last month, CEO Elon Musk said that only a small number of stores in "high-traffic locations" will stay open as galleries, showcases and Tesla information centers.

As a result, the range-topping Model S P100D, which had a United Kingdom price of £131,305, will become the Ludicrous Performance and cost just £83,300 - a monumental saving of £48,005. Tesla has stated that only the most expensive variants of the Model 3, S and X will be impacted. The pricing change will go into effect on March 18th, giving potential customers a few days to pull the trigger at the lower price point and giving Tesla a demand boost as customers will surely flock to the website to configure and order a Tesla before pricing goes back up.

All Tesla sales will still be conducted online, and the showrooms will remain to show clients how to order a Tesla on their phone.

The automaker explained that all sales worldwide will still be done online, while potential Tesla owners coming in to stores will simply be shown how to order a vehicle using the mobile app. Cars will still be available at stores to test drive.

Less than two weeks after Tesla said that it would cut all vehicle prices by an average of 6 percent and shift sales on online only, the electric vehicle (EV) maker is backpedaling on the stores closure plan and is lifting auto prices by 3 percent, except for the $35,000 Model 3. We will only close about half as many stores, but the cost savings are therefore only about half. Tesla says that stores will cary a "small number" of cars in inventory so that some buyers can drive away in a Tesla right away.

The company has been pushed to cut costs in recent weeks having suffered its "most challenging" year in its history. Physical stores will have a small selection for customers who want to test drive a vehicle or drive one off the lot immediately.

As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% or so on average worldwide.

The move comes after Tesla said last month it was shifting all sales online to help lower prices by about six per cent on average, allowing it to achieve the relatively low starting fee for the entry-spec Model 3.

In announcing the move on February 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.

Share