Economy

Tesla hits brakes on retail store closures, will raise prices instead

Tesla hits brakes on retail store closures, will raise prices instead

The controversy pertains to a post Musk fired off last month, saying the company would make about 500,000 cars this year. The company has announced that while it will be reducing staff in some locations, it will only shutter about half as many outlets as previously announced.

In the first weekend of March, Tesla owners staged protests outside Tesla stores and Superchargers in some parts of Asia after the company had announced the massive price cuts, meaning that existing customers for some models in some counties have paid by up to 40 percent more for their Teslas before the price reduction.

A copy of Tesla's blog post explaining the new store and pricing update has been provided below.

Here's the memo in its entirety. Tesla has now announced that it is going back on those plans.

The company noted that it already shuttered 10 percent of sales locations that weren't generating sufficient foot traffic, and those will remain closed.

Musk referred to some of the closed stores as being "in such hard or obscure locations, only Sherlock Holmes could find them".

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'These are stores that we would have closed anyway, even if in-store sales made up our entire sales model. The automaker will continue to evaluate another 20 percent of its locations for effectiveness and will close the ones it deems necessary.

Reversing a recent decision, Tesla will keep many of its showrooms open and instead raise the price of most of its electric vehicles in a move to help defray the cost. It said it will now "only close about half as many stores" as previously planned.

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.

The company has also bled dozens of top leadership over the past two years as Musk has ramped up production of the Model 3 in order to bring its price down to the $35,000 level. There won't be a price increase to the $35,000 version of the Model 3, though costlier variants will be made more expensive.

The electric vehicle manufacturer announced February 28 that it was planning on closing nearly all of its physical stores and switching to a purely online sales model, Business Insider reported.

The company will be sticking with some tried-and-tested elements of physical auto sales: cars will still be available for test drives at stores, and the shops will also carry a small number of cars in inventory for customers who wish to drive away a Tesla immediately.