Tesla Decides to Keep More Stores Open, Raise Vehicle Prices Worldwide

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Tesla Inc (NASDAQ: TSLA) changed its plan to close many of its stores in the United States and pass the savings to its customers.

On Sunday, Tesla CEO Elon Musk sent a memo informing employees that the company will keep most of its stores open. The company will also increase its vehicle prices by about 3 percent on average worldwide. The company also released a blog post regarding its stores and vehicle pricing.

According to Musk, Tesla already closed roughly 10 percent of its stores, which are in “difficult or obscure locations.”

He added that the company will reopen a few stores in high visibility locations with smaller crew. Tesla closed these stores due to “low apparent demand generation.”

Furthermore, Musk said the company is reviewing the effectiveness of another 20 percent of its stores over the next few months.

“All things considered, this seems like a reasonable compromise between current and future customers. We will only close about half as many stores, but the cost savings are therefore only about half,” said Musk.

He added, “Potential Tesla owners will have a week to place their orders before prices rise, so current prices are valid until March 18th. Note, 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 will continue its worldwide sales online

Moreover, Musk clarified that Tesla stores will only serve as showrooms. The company will continue its online-only sales worldwide.

“To be clear, all sales worldwide will still be done online, in that potential Tesla owners coming in to stores will simply 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,” he said.

TSLA shares were trading $288.54 per share up by 1.5 percent at the time of this writing 2:39 p.m. on Monday.