Tesla decides to keep more stores open and raise prices instead

Tesla decides to keep more stores open and raise prices instead

'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, ' the electric carmaker said.

To soften the blow of the initial announcement, the company used projected savings to reduce prices across its range by around six per cent, while some models in Australia had prices slashed by around $80,000. InsideEVs, a publication close to Tesla, tracks U.S. electric vehicle deliveries and according to its numbers, January and February deliveries were down by around 80 percent compared to the months leading up.

Tesla said the increase is to cover the cost of keeping more of its physical stores open.

While it is as yet unknown if the Model Y will be made immediately available in the base version, it is known that there will be a mix of the shorter range base Model 3 and higher range and spec'd models being produced at the same time at Tesla's Fremont auto factory.

A number of Tesla investors are suing company chief executive Elon Musk over his recent tweets.

Tesla also pulled the trigger on closing a few high-profile stores that were closed due to low throughput and, having re-evaluated the decision, the company has opted to re-open the stores, with reduced staffing. Before the $35,000 Model 3 was available, the cheapest Tesla started at $42,900. The day after Tesla sent out invitations to the unveiling of the Model Y crossover, VP of Engineering Michael Schwekutsch announced his sudden departure. Tesla notes that all sales will still be made online; anyone wanting to buy in a store will simply be shown how to use the online system.

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At the time Mr Musk had said the firm's cars were still "too expensive for most people". The tweets initiated an investigation into whether Musk sent the tweets to inflate Tesla's stock price. The return policy of 1000 miles or 7 days also remains in place.

A Tesla spokesman declined comment Monday beyond the company's statement.

Tesla was down 0.54%, trading near $282.60 a share early Monday, after the company hit the brakes on its plan to shutter its retail stores. That's a price point needed to reach more consumers and generate the sales that the company needs to survive, Musk has said.

The three percent increase on its top-end cars would be the first hike in prices after a series of cuts over the past year aimed at offsetting a reduction in green tax credits and the impact of rising tariffs overseas.

The blog post doesn't give a rationale for why Tesla is backpedaling.

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