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Tesla will raise prices and backtrack on closing most of its stores

Tesla to Raise Prices, Backtracks on Closing Most Stores

Tesla on Sunday announced that it would reduce the number of store closures that it had previously announced.

With that increase, the base price of the Mid Range Model 3 would rise $1,200 to $42,400 (all prices assuming the mandatory $1,200 destination and documents fee remains the same), for example, and the Long Range Dual Motor all-wheel drive Model 3 would rise from $48,200 to $49,610.

The move comes after Tesla said last month it was shifting all sales online to help lower prices by about six per cent on average, allowing it to achieve the relatively low starting fee for the entry-spec Model 3.

The company stated that it has evaluated all of its stores over the past two weeks and has chose to keep "significantly more" stores open than originally anticipated. Some of the stores that have already closed will be reopened with fewer staff members.

Less than two weeks after announcing a plan to shift all of its sales online in effort to cut costs, Tesla now says it will keep physical stores open and instead raise the prices of a slew of its vehicles.

The company gave no numbers, but said it would close only about half the stores that it had meant to.

The carmaker said potential buyers can place orders until March 18 at the old prices.

It's unclear how many stores Tesla will keep open, exactly, and where.

The company has also bled dozens of top leadership over the past two years as Musk has ramped up production of the Model 3 in order to bring its price down to the $35,000 level.

The electric vehicle manufacturer announced February 28 that it was planning on closing nearly all of its physical stores and switching to a purely online sales model, Business Insider reported.

Tesla just took to its official blog to announce that it would not be closing as many stores as it had initially planned and would be raising prices 3% on select configurations of the Model 3, S, and X, effective March 18th.

Gartner analyst Michael Ramsey called the move "startling" and said it undermines the credibility of Musk and Tesla's management. Another 20 percent of store locations are under review and have won a reprieve for "the next few months".

Also Monday, a NY attorney announced that Tesla's former chief of security has filed a whistleblower complaint with the U.S. Securities and Exchange Commission.

Fortunately, test drives will still be available by request and stores will have a few cars on hand for anyone who decides they need to buy one on the spot.

Tesla has cut thousands of employees since the start of the year as the carmaker continues to overhaul its operations to hit profitability.

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