Tesla goes to online sales only

Tesla is shifting all of its sales from stores to the internet, saying the move is needed to cut costs so it can sell the mass-market Model 3 for a starting price of US$35,000 (NZ$51,400).

The Palo Alto, California, company announced the change yesterday and said it’s now taking orders for the car, which CEO Elon Musk said was essential to Tesla’s survival.

‘‘It’s 2019,’’ Musk told reporters. ‘‘People want to buy online.’’

Musk also backed away from earlier guidance that the company would be profitable in all future quarters. Because of the moves, it will lose money in the first quarter and ‘‘likely’’ be profitable in the second, he said.

The electric-car and solar-panel company will close many of its stores, but leave some open as galleries or ‘‘information centres’’ in high-traffic areas. Musk didn’t give a number of stores that will be closed or employees who will be laid off.

He said the decision to close stores was hard, but is right for the future of the company.

Tesla will offer the standard base Model 3 for $35,000, which can go 350km per charge. It also will offer a $37,000 version with a premium interior that accelerates faster and can go 385km per charge.

The company started taking orders for the Model 3 in March of 2016, but until now hasn’t been able to cut costs enough to sell them for US$35,000 and make a profit. The cheapest one that could be ordered until yesterday started at US$42,900.

‘‘This is the only way to achieve the savings for this car and be financially sustainable,’’ Musk said. ‘‘It is excruciatingly difficult to make this car for US$35,000 and be financially sustainable.’’