New Plan! Tesla Decides to Keep Stores, Raise Prices

Steph Willems
by Steph Willems

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]

Steph Willems
Steph Willems

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  • Indi500fan Indi500fan on Mar 11, 2019

    #1 of Deming's 14 points Constancy of purpose

    • ToolGuy ToolGuy on Mar 11, 2019

      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).

  • B534202 B534202 on Mar 11, 2019

    "(Again, the Standard Range Model 3’s price remains fixed.)" Until Musk changes his mind 5 minutes later.

  • JK I grew up with Dodge trucks in the US, and now live in Turin, Italy, the home of Fiat. I don't think Italians view this as an Italian company either. There are constant news articles and protests about how stalantis is moving operations out of Italy. Jeep is strangely popular here though. I think last time I looked at stelantis's numbers, Jeep was the only thing saving them from big big problems.
  • Bd2 Oh yeah, funny how Trumpers (much less the Orange Con, himself) are perfectly willing to throw away the Constitution...
  • Bd2 Geeze, Anal sure likes to spread his drivelA huge problem was Fisher and his wife - who overspent when they were flush with cash and repeatedly did things ad hoc and didn't listen to their employees (who had more experience when it came to auto manufacturing, engineering, etc).
  • Tassos My Colleague Mike B bought one of these (the 300 SEL, same champagne color) new around June 1990. I thought he paid $50k originally but recently he told me it was $62k. At that time my Accord 1990 Coupe LX cost new, all included, $15k. So today the same car means $150k for the S class and $35k-40k for the Accord. So those %0 or 62k , these were NOT worthless, Idiot Joe Biden devalued dollars, so he paid AN ARM AND A LEG. And he babied the car, he really loved it, despite its very weak I6 engine with a mere 177 HP and 188 LBFT, and kept it forever. By the time he asked me to drive it (to take him to the dealer because his worthless POS Buick Rainier "SUV" needed expensive repairs (yes, it was a cheap Buick but he had to shell out thousands), the car needed a lot of suspension work, it drove like an awful clunker. He ended up donating it after 30 years or so. THIS POS is no different, and much older. Its CHEAPSKATE owner should ALSO donate it to charity instead of trying to make a few measly bucks off its CARCASS. Pathetic!
  • RHD The re-paint looks like it was done with a four-inch paintbrush. As far as VWs go, it's a rebadged Seat... which is still kind of a VW, made in Mexico from a Complete Knock-Down kit. 28 years in Mexico being driven like a flogged mule while wearing that ridiculous rear spoiler is a tough life, but it has actually survived... It's unique (to us), weird, funky (very funky), and certainly not worth over five grand plus the headaches of trying to get it across the border and registered at the local DMV.