Tesla backs off on store closures, plans increasing top-end price

by SpeedLux
$35,000 Tesla Model 3

Tesla Inc backtracked its strategy to close all of its U.S. stores and instead will increase prices of its high-end vehicles by about 3 percent on average, as it seeks to earn a profit.

The company stated last Sunday that it would now be closing only about half as many stores than what was initially planned in a widely criticized move previously this month to cut overhead and shift its whole distribution network online.

“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,” Tesla stated.

“As a result Tesla will need to raise vehicle prices by about 3 percent on average worldwide.”

Other than that, CEO Musk has until the end of the day on Monday to describe why he should not be held in contempt for latest tweets that U.S. securities regulators say breached a September fraud settlement.

The case is the latest significant challenge by officials to Musk’s leadership as Tesla seeks to make good on his promises to Wall Street that it will soon be consistently profitable and will not require more capital.

The three percent boost on its top-end cars would be the first increase in prices after a series of cuts during the past year aimed at offsetting a decrease in green tax credits and the impact of increasing tariffs overseas.

Tesla stated the global price increases would apply to the more costly versions of the Model 3, Model S and Model X, and that there will be no price boost to the $35,000 Model 3.

“The 3 percent price increase announcement still indicates … strong demand”, stated Ivan Feinseth, an expert with Tigress Financial Partners.

The automaker stated potential buyers can place orders until March 18 at the old prices. Presently, the Model S and Model X models are priced starting at $79,000 and $88,000 before savings.

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