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

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Tesla also pulled the trigger on closing a few high-profile stores that were closed due to low throughput and, having re-evaluated the decision, the company has opted to re-open the stores, with reduced staffing.

Tesla cut the prices in response to falling tax incentives for its cars, after the company reached the cap on the credits last summer. Of course, anyone ordering a Tesla to their home sight unseen will be able to return the vehicle after 1,000 miles or seven days (whichever is first) thanks to the company's new return policy announced last month. 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.

Just a few days ago, Tesla released the cheaper Model 3 and announced sweeping changes to its business model, closing most of its existing physical stores and turn those that remain into showrooms and "information points".

Potential Tesla owners will have a week to place their orders before prices rise, so current prices are valid until March 18th.

Despite this possible reprieve for the thousands of retail workers at Tesla, Musk's email and the blog post state that sales will remain online only, and that the stores will exist just to show people how to order a vehicle "on their phone in a few minutes".

To help fund the reconceived retail operation, Tesla said it will raise the prices of its Model S, Model X and pricier versions of its Model 3 by an average of 3 percent, starting on March 18.

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Tesla plans to raise average vehicle prices by about 3 per cent globally after it reversed a decision to shut down most of its stores. It said it will now "only close about half as many stores" as previously planned. Stores will also carry a small number of cars in inventory for customers who wish to drive away with a Tesla immediately. Buyers coming into stores will be able to do a test drive, and if they choose to buy a auto, they'll be shown how to do that on their phones.

The company has been pushed to cut costs in recent weeks having suffered its "most challenging" year in its history.

You'll keep seeing Tesla stores after all.

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.

Tesla had said less than two weeks ago that it would begin shutting most of its stores in a cost-cutting move created to help reduce the price of its bestselling vehicle, the Model 3, to as low as $35,000.

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