Tesla changes plans and will keep more stores open

Roman Schwartz
March 12, 2019

Recently, though, Tesla seems to be somewhat prone to waffling as opposed to sticking with a coherent game plan. However, several high-visibility locations that it closed will reopen "with a smaller Tesla crew", it said.

Tesla has backed off a plan to close all its US stores and will instead raise prices of its higher-end vehicles by about 3 percent on average.

'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's statement clarified. Musk described the winding down of many stores as a cost-cutting move that enables Tesla to offer a long-promised US$35,000 version of the Model 3 sedan, the automaker's first mass-market vehicle.

In a blog post Sunday, the company announced it would "keep significantly more stores open than previously announced".

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 auto "on their phone in a few minutes".

Tesla also suggested a brick-and-mortar retail strategy was important in its annual report filed February 19, just nine days before Musk announced the pivot to online sales.

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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.

The company said it would await the results of a further review on the usefulness of physical locations, and only cut the original price of the vehicle be "about 3%".

Musk's tweet to his more than 24 million Twitter followers claiming the electric vehicle-maker would produce around 500,000 cars in 2019 complied with company's communication policy for senior executives, lawyers for the Tesla chief wrote in a filing in federal court in Manhattan.

Tesla is set to marginally increaser the cost of its cars worldwide as it looks to keep more of its stores open.

Separately, a NY attorney on Monday announced that Tesla's former chief of security has filed a whistleblower complaint with the U.S. Securities and Exchange Commission. Given The Economist Intelligence Unit is forecasting consumer price inflation of 2.2% in the U.S., this is less than a 1% increase in real terms.

The news represents yet another drastic course correction that sets careers off on a different trajectory and destabilizes any semblance of peace across its fleet of retail stores. 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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