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In a blog post Sunday, Tesla said it has decided to close fewer stores than previously planned, but doing so will result in 3 percent price increase for vehicles worldwide.
Tesla surprised watchers earlier this month with a plan to close many of its 378 retail stores worldwide and lower all vehicle prices by about 6%.
Tesla explained the reasoning behind the new plan in the post:
Over the past two weeks we have been closely evaluating every single Tesla retail location, and we have decided to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months. When we recently closed 10% of sales locations, we selected stores that didn’t invite the natural foot traffic our stores have always been designed for. These are stores that we would have closed anyway, even if in-store sales made up our entire sales model. A few stores in high visibility locations that were closed due to low throughput will be reopened, but with a smaller Tesla crew. 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.
As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% on average worldwide. In other words, we will only close about half as many stores, but the cost savings are therefore only about half.
Tesla said potential owners will have a week to place their order before prices rise, so current prices are valid until March 18th. There will be no price increase to the $35,000 Model 3. The price increases will only apply to the more expensive variants of Model 3, as well as Model S and X.
Tesla stressed that all sales will still be done online. Potential Tesla owners coming in to stores will be shown how to order a Tesla on their phone in a few minutes. Stores will also carry a small number of cars in inventory “for customers who wish to drive away with a Tesla immediately.”