You can be on Entrepreneur’s cover!

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.

By Matthew Humphries

entrepreneur daily

This story originally appeared on PCMag

via PC Mag

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.

Matthew Humphries

Senior Editor

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

From Tom Brady to Kevin O'Leary – See Who Lost Big in the Wake of the FTX Crypto Collapse

The crash exposed an $8 billion hole in FTX's accounts, leaving investors and customers scrambling to recoup their funds.

Business News

This Highly-Debated Piece of Cinematic History Just Sold For Over $700,000 at Auction

The wood panel from "Titanic" is often mistaken as a door. Either way, he couldn't have fit. (Sorry.)

Business News

Mark Zuckerberg Says This CEO Is the 'Taylor Swift' of Tech

Meta's CEO posed with Nvidia CEO Jensen Huang on Instagram Wednesday.

Fundraising

Avoid These 9 Pitch Deck Mistakes When Asking Others For Money

Crafting an efficient pitch deck requires serious effort, but at least it's not wandering in the dark since certain rules are shaped by decades of relationships between startups and investors.