Tesla has backpedaled on its plans to close a vast majority of its stores worldwide in order to save money, and to lower the price of its cars accordingly. The California-based automaker published a blog post to explain it will keep more stores open than it initially planned, and it will make most of its cars a little bit more expensive to offset the cost of running a dealer network.
“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,” the company wrote on its official website. It will reopen some of the stores it closed in high-visibility locations, but they will be staffed with fewer employees. Ten percent of the stores it closed will remain that way; they were the locations that didn’t perform well and would have closed even if Tesla didn’t shift its sales model to online-only. Twenty percent of the stores that were set to close around the globe are under review, meaning the company will evaluate how well they do in the coming months before deciding whether to keep them open or shutter them.
In early March 2019, Tesla explained closing most of its stores allowed it to slash the price of its cars by about 6 percent. Instead, it will only close roughly half of the stores it planned to, so it will only reduce its prices by approximately 3 percent. The entry-level Model 3 will still be priced at $35,000, but the higher-spec versions and the bigger Model S and Model X will both cost more after March 18.
The company remains committed to its online-only sales model. Though some stores will keep a small inventory for buyers who want to drive away in a new Tesla immediately, a vast majority of the motorists who visit a Tesla showroom will be shown how to buy a car online by using either a smartphone or a tablet. Tesla pointed out that 82 percent of Model 3 owners bought their car without taking a test drive, so it argued it doesn’t need to have demo cars in stock. However, buyers who want to try before they buy will be able to arrange a test drive through their nearest dealer.