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Tesla backtracks on decision to close stores, raising prices instead

Tesla Model S
Image credit: Tesla
(Image credit: Tesla)

Tesla has reversed its decision to close its brick-and-mortar stores and take sales online only. Instead, the company will save cash by increasing the prices of every car in its range except the $35,000 (around £26,400, AU$49,300) version of the Model 3.

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'.

"Shifting all sales online, combined with other ongoing cost efficiencies, will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected," the company said.

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 most of them open.

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

"In addition, there are another 20% of locations that are under review, and depending on their effectiveness over the next few months, some will be closed and some will remain open."

Passing the buck

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.

"As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% on average worldwide," the company said. "In other words, we will only close about half as many stores, but the cost savings are therefore only about half."

The global price hike will come into force on March 18, so if you've been considering splashing on a Tesla then you still have a week to make the most of current prices.

Via The Verge