Tesla reverses out of showroom closures


Last month, we announced that we would be winding down many of our stores and moving to online-only sales in order to pass the savings along to our customers. The electric auto company and its CEO and founder Elon Musk have come under increasing scrutiny following a crash of one of its electric cars while using the controversial autopilot service.

Tesla has pulled a U-turn on plans to close nearly all of its dealerships while announcing price rises for its more expensive cars.

This backtracks the company's announcement less than two weeks ago that it would shut most physical stores and shift sales worldwide to "online only".

The carmaker is continuing with its plan to expand its online sales. Potential buyers can still test drive cars at the stores, which will "carry a small number of cars in inventory for customers who wish to drive away with a Tesla immediately". That tweet, the SEC argued, violated a September fraud settlement barring Musk from sharing material information about Tesla on social media without the company's pre-approval.

Tesla is increasing prices of its electric cars after scaling back a store closure programme.

The only specific contained in Tesla's latest missive is a 3 percent increase to the price of Model S and X vehicles, and "more expensive variants" of its Model 3. The SEC's interpretation of the settlement "would effectively prevent Musk from speaking on any matters related to Tesla business based on the subject matter alone".

Musk on February 19 tweeted to his more than 24 million Twitter followers that Tesla would make around 500,000 cars in 2019. He was also required to step down as chairman of the company's board and pay a $20 million fine.

Now, however, the company has backtracked, saying in a blog post that it has taken a close look at each of its stores and realized it makes more sense to keep majority open.

As it turned out, Musk didn't have the funding secured. Actually, the SEC's motion to have him held in contempt caused Tesla's stock price to go down 3.4 percent, the motion says. In its fourth-quarter earnings release on January 30, Tesla said it was targeting annualized Model 3 output "in excess of 500,000 units" sometime between the fourth quarter of this year and second quarter of 2020.

Gouthro's tip also claims that a proposal to take Tesla private in 2018 was discussed and viewed with skepticism by "many" Tesla employees before Tesla CEO Elon Musk tweeted about the proposal in August, Meissner Associates said. Tesla paid for the purchase with about 50,000 previously authorized shares.