By on March 11, 2019

It’s hard to keep up with the endless tweaks and about-faces made to Tesla’s short-term sales and pricing strategies. Some automakers roll out changes and stick to them for years; Tesla pulls over and adjusts its near-term operations from a rest stop off the side of the interstate.

The latest change to Tesla’s game plan involves a reversal of a strategy announced just a couple of weeks ago. The lion’s share of Tesla’s stores will not close, after all. And, instead of prices dropping across the board to reflect the cost savings, the automaker will raise them instead.

Sales will still be online-only, however.

The U-turn comes after another such direction change — this one in Tesla’s financial standing. After two profitable quarters in the second half of 2018, the automaker predicted nothing but profits going forward. Not so fast, CEO Elon Musk said recently.

It was reported last week that Tesla’s store closures have already led to an 8-percent drop in employee headcount, with some staffers claiming they first found out about their perilous job status from news reports, not the company that employed them. Some can breathe easier now.

“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 automaker said in a Sunday blog post.

Tesla claims the stores — 10 percent of total locations — which have already closed were always going to close. Blame low foot traffic, the automaker said. Now, certain stores in high-profile locations have reopened with a smaller “crew,” while another 20 percent are under review.

Of that crop, “depending on their effectiveness over the next few months, some will be closed and some will remain open,” Tesla claims.

While the storefront cull was expected to yield an average price reduction of 6 percent on Tesla vehicles (minus the just-unveiled $35,000 Model 3 variant), the retention of roughly half of Tesla’s stores means pricing will need to reflect the added cost. The company said customers have until March 18th to order a car at that earlier, revised pricing. (Again, the Standard Range Model 3’s price remains fixed.)

Because it’s following through on only half of the anticipated store closings, Tesla claims the price drop will be half of what customers were told to expect. Thus, prices are rising 3 percent from that short-lived trough.

Another recent promise is still alive — at least for now. The 1,000-mile, seven-day return policy remains in place, Tesla claims.

[Image: Tesla]

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41 Comments on “New Plan! Tesla Decides to Keep Stores, Raise Prices...”


  • avatar
    labelnerd

    Elon needs to go back on his meds. Wait, maybe this is because he’s already on them!

    • 0 avatar
      Luke42

      This is what “move fast and break things” looks like from the outside.

      Tesla is mature enough that they need to give away from the startup mentality and embrace deep analysis of big decisions before committing to a course of action.

  • avatar
    TimK

    As Mike Tyson once said, everyone has a plan — until they get punched in the face.

  • avatar
    SCE to AUX

    “Over the past two weeks we have been closely evaluating every single Tesla retail location”

    They should have done this 4 weeks ago, instead of adding to their normal drama.

  • avatar
    jack4x

    According to another site, this was because they can’t escape their leases on a bunch of these stores and were about to get sued.

    Missing something this obvious is a sign that maybe your CEO shouldn’t be trying to run 3 companies at once?

  • avatar
    jkross22

    Tesla is testing the theory that there is no such thing as bad press.

    They continue to make it look like it’s amateur hour.

    Wouldn’t be surprised if their next move is to put Elizabeth Holmes on their board to help look at ways to reduce healthcare costs.

    • 0 avatar
      SPPPP

      I’ll see your Elizabeth Holmes and raise you a Katie Holmes. She’s been around powerful men and cults before, so she’ll know how to keep Elon grounded.

  • avatar

    Tesla thrives on chaos. It there were no controversy Musk would create one. Despite all the turmoil the company can still produce cars.

    • 0 avatar
      jatz

      “Tesla thrives on chaos.”

      You gotta keep your true believers mobilized.

      They’re the skinny-jeans counterparts of Trumpists who claim his every abandonment of nationalist principles is just a 4D chess move we can’t comprehend.

      • 0 avatar
        Luke42

        I’m a Tesla fanboy.

        Musk is interesting and sometimes insightful, but I really just want the [email protected] car.

        Tesla’s prices have been declining and my household income is expected to increase — and I get the car when those lines meet.

        Musk is [email protected]!t crazy — but in a very specific way that’s useful, and he’s usually smart enough to stack the deck when he takes big risks. But I have little doubt that his last days will resemble those of Howard Hughes — but there’s a nonzero chance they’ll pull him kicking and screaming from a penthouse on Mars instead of from a penthouse in Vegas. Sometimes crazy gets $#!t done, sometime crazy is just crazy. I’m glad he’s around, but I’m also glad I don’t work for him.

        Now, it’s time to go play on the Tesla configurator and run some financial calculations again, to see if it’s time to push the “deliver my car” button.

        • 0 avatar
          jatz

          Thank you; that’s exactly what I meant.

        • 0 avatar
          SCE to AUX

          @Luke42: Still too much crazy for me.

          At the end of the day, I want to forget about the mfr of my car, without constant reminders of them (much less their CEO). I can’t name the CEO of Hyundai, their EV in my garage has no quality issues, and I believe the local dealer will be around for a long time (even though I have no plans to visit them).

          • 0 avatar
            EGSE

            Tesla is past the start-up phase; they need to act like it. Appoint a competent COO and have the staff report to him/her.

            Musk should be a shareholder-without-portfolio. At this stage of their evolution his volatility works against the company’s best interests. Lock him in a soundproof glass room. A nice shiny object, look but don’t touch. Where is B.F. Skinner when we need him?

  • avatar
    Wheatridger

    Regarding the photo: Is that a car attached to the back of that iMac?

  • avatar
    EBFlex

    It amazes me that there are people still so stupid as to think this is what a normal healthy company does

    • 0 avatar
      slavuta

      forget about company – look at the car. Damn iPad on wheels.

      • 0 avatar
        EBFlex

        Oh the products themselves are awful as well. The above iPad on wheels is even worse than the new Explorer.

        But I’m guessing even the Explorers bumpers will stay attached in the rain

        • 0 avatar
          slavuta

          I’ve seen many cars with assembly quality issues – Accord, JGC, RDX (to name most memorable). But with Tesla (put Volvo here too) I principally disagree that car functionality is hidden in the menus of iPad. For me, this is a non-starter.

  • avatar
    vehic1

    Hope they hang in there, but this looks like:
    Cheech and Elon – Still Smokin’

  • avatar
    James2

    Tesla needs someone who can think in more than 140 characters at a time and has attended impulse control training.

  • avatar
    Lockstops

    Musk is such a visionary. He’s taking corporate management to a new era: such quick strategy turns that it can only be achieved with today’s digital media, the old newspaper media would be too slow to keep up with his ‘management genius’ printing yesterday’s completely opposite old strategy…

  • avatar
    jatz

    This is what the phrase “death throes” means.

  • avatar
    indi500fan

    #1 of Deming’s 14 points
    Constancy of purpose

    • 0 avatar
      ToolGuy

      We should really talk more about Deming. People tend to lump Toyota/Honda/etc together, but really there is Toyota, and everyone else. And the difference for Toyota, when there was a difference, was Deming (statistical process control, variation reduction).

      (OK OK I also like him because he wanted to “…eliminate the annual rating or merit system” – point 12)

      My family recently acquired its first real live Toyota (2010 model) after I quit working for the other guys. I love the reliability (but I absolutely despise the old-style oil filter design).

  • avatar
    b534202

    “(Again, the Standard Range Model 3’s price remains fixed.)”

    Until Musk changes his mind 5 minutes later.

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