Tesla walks back plan to close stores
Tesla is raising prices and scaling back its decision to close most of its stores.
The electric vehicle company’s sudden reversal adds to investor concerns that it lacks a cohesive strategy for growing into a major international automaker.
After previously cutting prices by an average of 6 percent, the company is now raising prices by an average of 3 percent.
Customers still can get the full price cut through March 18, with the Model S sedan starting at $69,750 and the Model X SUV starting at $78,950.
Tesla described the price hike as necessary to pay for a decision to “close about half as many stores” as it had previously planned.
It’s still unclear exactly how many locations the company had originally intended to shutter, though it had said it would be “most” of its stores.
“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,” Tesla said in a blog post.
The company also said it won’t raise the starting price of the base version of the Model 3 compact sedan, which costs $35,000 and recently became available for ordering after a long wait for its arrival.
“We do not think we will raise too many eyebrows with the opinion that this looks like amateur hour,” Evercore ISI analyst Arndt Ellinghorst wrote Monday.
“There should be no argument that this was a better topic for internal-discussion before what clearly has been and will be two months of pure price confusion for the consumer.”
Tesla is “clearly in need of a stronger middle management layer,” Ellinghorst said.
The company said it would still sell all of its vehicles online, per its previously announced plan.
That means that anyone who visits a Tesla store will be directed to carry out the purchase on the company’s website.