Tesla Decides to Keep Stores Open but Raise Prices

A couple of weeks ago, Tesla announced a $35,000 Model 3 and the closure of its physical stores, but this week that decision has been reversed and Tesla's prices are increasing.

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Tesla Decides to Keep Stores Open but Raise Prices
Image credit: via PC Mag
Senior Editor
2 min read
This story originally appeared on PCMag

Tesla clearly isn't a company afraid to change its mind, and this week that's exactly what happened. In late February, Tesla announced it would be moving to online sales and closing down its physical locations, but this week that decision has been reversed with one side effect being higher prices for most of its vehicles.

Writing on the company's blog, Tesla explained that it has spent the past two weeks evaluating its retail locations and concluded most of them should remain open. The 10 percent that already closed did so due to poor natural foot traffic and would have been shut down anyway. A further 20 percent of stores are under review and may be closed, where as some "high visibility" stores that have already closed may now re-open.

The original decision to close all physical locations was done to cut costs. Now, Tesla believes only half of the stores will close, but that means only half the intended cost savings will be realized. In order to counteract that loss of savings, Tesla is set to increase the price of its vehicles by an average of 3 percent worldwide. The only vehicle to avoid that increase is the newly announced $35,000 Model 3.

The current pricing will remain in place until March 18, but after that the more expensive variants of the Model 3, alongside all Model S and Model X vehicles, will have the price increase applied.

Tesla isn't changing its plan to move all sales online, though. Visiting a retail location will require the customer purchase a Tesla using their phone in most cases, but "a small number of cars" will be available for customers who want to drive off the same day. Tesla's alternative to having vehicles available to test drive before purchase is a 1,000 mile or seven day return policy.

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