Tesla Decides To Keep Stores Open But At A Cost To Consumers

Tesla will raise the price of its vehicles after going back on a recent decision to close most of its stores

Elon Musk is backtracking from a jarring change in Tesla Inc.'s retailing strategy, keeping numerous company's stores open and raising the prices of its electric cars as a result.

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. It has decided after that evaluation that it will keep "significantly more" stores open than it had planned. Potential buyers can still test drive cars at the stores, which will "carry a small number of cars in inventory for customers who wish to drive away with a Tesla immediately".

Tesla's PR notes that all vehicles sales will still be conducted online, though it also states that a small number of vehicles will be on-hand for immediate purchase.

Tesla said the worldwide price hikes will apply to the more expensive variants of Model 3, Model S and Model X.

Lawyers for Tesla chief Elon Musk on Monday argued that U.S. regulators overstepped their bounds by calling for him to be held in contempt for a tweet.

In a February 28 blog post on the Tesla website, it was stated that the electric-automaker would close most of its 378 stores worldwide. He said the sooner-than-expected arrival of a US$35,000 Model 3 likely reflected the need to replenish cash after paying off a US$920 million convertible bond and added that weak USA sales early this year also probably hasn't helped.

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Beyond that, the Masters is fast approaching and Woods, so far, has played in only three tournaments. The American's last win was in 2013 when he shot 13-under 275 for a two-stroke victory.

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

Recently, though, Tesla seems to be somewhat prone to waffling as opposed to sticking with a coherent game plan. Tesla wants to increase its vehicle transportation capacity and cut delivery times.

To settle fraud charges stemming from the tweet, Musk had to resign as Tesla chairman, both he and the company had to pay $20 million fines, and the SEC demanded oversight of his social media use. It also contradicts its intention to give up test drives because of the existing 1,000 miles or 7 days return policy.

Shares of the company, among Wall Street's most volatile in recent months, were roughly flat in early trading on Monday. That's a price point needed to reach more consumers and generate the sales that the company needs to survive, Musk has said.

As part of its move to shift all sales online and other ongoing cost efficiencies, Tesla slashed the prices of its Model 3, Model S, and Model X vehicles by about 6% on average.

However, the long-promised $US35,000 Model 3 will not be impacted by the increase. Since Tesla's inception, the company has never posted positive earnings over a year.

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