Tesla pulls a U-turn on dealer closures but raises prices

Muriel Colon
March 13, 2019

However, "a few stores in high visibility locations" will be reopened.

The electric car-maker revealed it was backing off its plan to close all of its US stores in a blog post on Monday.

"Over the next few months we will be winding down many of our stores with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centres", the blog went on to state.

Tesla will raise the price of its vehicles after going back on a recent decision to close most of its stores.

The company stressed that its lowest-priced EV, the $35,000 Model 3, will not get a price hike.

Gartner analyst Michael Ramsey called the move "startling" and said it undermines the credibility of Musk and Tesla's management.

Some stores will keep a small inventory of cars on hand so purchasers can drive away in a new vehicle immediately.

Separately, Chief Executive Officer Musk has until the end of the day on Monday to explain why he should not be held in contempt for recent tweets that US securities regulators say violated a September fraud settlement. Ramsey asked. "It's nearly as if the decision was announced and made without any analysis of what the outcome would be".

Tesla says that all sales worldwide will still be done online.

Musk and Tesla each paid a $20 million fine as part of a settlement agreement with the SEC and Musk agreed to step down as Tesla's chairman.

Perhaps realizing that closing the majority of its stores was a short-sighted move, the company over the weekend announced that it will keep most of its stores open and that the promised price cuts for the Model S and Model X won't be implemented.

Tesla's PR statement offers no context or explanation for why the company has made this dramatic change less than two weeks after unveiling a significantly different strategy. It's unclear how that applies to the company's local Australian operations, about which Tesla Australia will not comment.

Lawyers for Tesla chief Elon Musk on Monday argued that U.S. regulators overstepped their bounds by calling for him to be held in contempt for a tweet.

DON'T MISS: Tesla Model 3 Standard Range arrives soon at $35,000 and 220 miles. So that makes models S, 3, X and Y.

In a corporate blog post at the end of February, the electric vehicle maker said it planned to wind down most of its stores and move to an online-only sales model in an effort to keep prices down while remaining financially sustainable. Tesla CEO Elon Musk has struggled to lead the company to consistent profitability.

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