Tesla changes plans and will keep more stores open

Tesla Changes Its Mind Over Store Closures, Raises Prices By 3%

Tesla Inc Chief Executive Elon Musk has until the end of the day on Monday to explain why he should not be held in contempt for recent tweets that USA securities regulators say violated a September fraud settlement. 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.

Over the past two weeks we have been closely evaluating every single Tesla retail location, and we have made a decision to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months.

Tesla said the worldwide price increases would apply to the more expensive versions of the Model 3, Model S and Model X, and that there will be no price increase to the $35,000 Model 3. Why didn't the company do a proper review of its store network before its first announcement? In a turnabout from the decision that caught staff and investors off guard, the company has since chose to keep "significantly" more stores open, it said on its blog.

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

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

That's good news for most of Tesla's sales staff, but not for new customers, who will pay the price for keeping the stores open. In a blog post, the company said about half the locations it was planning to close will stay open. It will now raise vehicle prices by about 3 percent worldwide.

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. And whether those numbers are directly involved or not, the company changed course, announcing late Sunday that it's not happening in such a sudden and comprehensive way.

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

Last week, Tesla announced it had secured as much as US$521 million in loans from Chinese banks to build a vehicle and battery factory in the country. The policy allows new buyers to drive the auto for 1000 miles or seven days. Though the company noted that most orders occur through the Tesla website, that's probably a function of eager Tesla buyers willing to pull the trigger with not so much as a test drive.

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