Author: Neal E. Boudette / Source: New York Times
Laura Buckman for The New York Times
Just days after saying that it would close most of its stores, Tesla is making an abrupt U-turn.
In a message posted on its blog just before midnight Sunday, the electric-car maker said it had decided to retain many of the locations it had shut down or was planning to close.
And it said it would raise most of its vehicle prices about 3 percent worldwide, just weeks after cutting prices.“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 as we continue to evaluate them over the course of several months,” the company said in the blog post. The price increases, it said, are necessary to make up for the loss of savings that was anticipated from the store closings.
The flip-flops are the latest sign of turmoil surrounding the company and its chief executive, Elon Musk.
“This reversal is bizarre and indicates a lack of actual planning in the earlier announcement,” said Mike Ramsey, a Gartner analyst. “Their retail stores still serve a real need.”
Until last month, Tesla had been rushing to expand its network of showrooms and mall galleries, which display its cars but take no customer orders.
On Feb. 28, Mr. Musk told reporters in a conference call that Tesla would start offering a long-awaited version of its Model 3 sedan with a starting price of $35,000. Previously, the least expensive Model 3 cost $43,000 before tax incentives.
Mr. Musk said closing its stores would allow Tesla to cut costs enough to make the Model 3 profitable at the lower price. But he would not elaborate on those calculations, and he said Tesla would lose money in the first quarter, contrary to previous forecasts.
As part of the cost cutting, he said, Tesla would henceforth take orders only online. Tesla affirmed the online approach in its announcement Sunday night, saying its stores would serve as a way to introduce potential buyers to Tesla vehicles, provide a test drive on request — another reversal from its earlier announcement — and show how to make a purchase.
“Stores will also carry a small number of cars in inventory for customers who wish to drive away with a Tesla immediately,” it added.
In a recent email to employees, Mr. Musk said 78 percent of Model 3 orders were already placed online. Buyers…
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