Tesla to raise prices, backtracks on closing most stores

Tesla on Sunday announced that it would reduce the number of store closures that it had previously announced.

Tesla is set to marginally increaser the cost of its cars worldwide as it looks to keep more of its stores open. Some of those stores that have closed may now reopen with a smaller crew.

It's unclear how many stores Tesla will keep open, exactly, and where.

In all, only half as many stores as initially planned will be closed.

The increased pricing will be introduced after March 18, so potential buyers have a week left to lock in a Tesla with the current pricing. "These are stores that we would have closed anyway, even if in-store sales made up our entire sales model", the company said.

He told Press Association: 'The decision to slash prices of new models has put me off Tesla.

Tesla had closed 10 percent of stores recently.

On February 28, Tesla said that the long-awaited US$35,000 Model 3 was now available, but in order to "remain financially sustainable", the EV maker was shifting sales worldwide to online sales only, meaning it would be closing down stores.

At the start of March, Tesla said it would be closing nearly all of its showrooms, and shifting sales to online only. He said Musk plays a very active role in the company board's decision making.

It's not clear if Tesla will increase just the base price of the vehicles, or if certain options will be subject to the price hike as well.

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.

And despite test drives being one of the biggest draw cards of the stores, the company is confident that its "1000 miles or 7 days" return policy will negate customers' need to try a very expensive vehicle before they actually buy one.

Its least expensive auto, the $35,000 Model 3, will stay that price, though the cost of the more expensive Model 3s, and the S and X, will go back up. Tesla wants to increase its vehicle transportation capacity and cut delivery times.

The move made no sense to begin with because Tesla had spent millions fighting in courts and state legislatures trying to change laws that prevented companies from selling vehicles at their own stores, Ramsey said.

Still, Tesla shares were largely unaffected, with the stock gaining 3 per cent on Monday to $US290 a share, maintaining its market value at more than $US50 billion, much to the chagrin of the army of "short-sellers" who are betting on the company failing.

Vanessa Coleman

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