New Plan! Tesla Decides to Keep Stores, Raise Prices

Steph Willems
by Steph Willems
new plan tesla decides to keep stores raise prices

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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  • 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.

  • Drnoose Probably just cutting conservative talk radio off at the knees. They can’t beat it, so kill it one way of the other.
  • Teddyc73 Looking forward to this. Hopefully it doesn't succomb to the leftist agenda and only come as an EV. If there is a gasoline version and a decent sized bed I'll consider this to replace my Ram 1500 when the day comes. Please let it be available in colors other than the same boring ones Ram has offered for years.
  • Xidex i haven't even turned the dial to AM since the 90's I think at that time it was only because there is one station i liked was on the AM dial (it is no longer around) Someone had to point to the station otherwise i wouldn't have even scanned the AM dial. I still think the AM dial should be left on radios though, If no one listened to it then there wouldn't be any stations would there.
  • Kwik_Shift I have five AM stations preset, each different from one another in terms of content. Some politics, some day to day, some do it yourselfing or help. Focus is more on local news and events. FM is just about pushing crap music and djs pushing the MSM message for their corporate overlords. FM is about making radio sound exactly the same all over North America. I like ONE FM station that plays different varieties of country music and has an entertaining dj. Overall, to each their own.
  • Kat Laneaux What's the benefits of this as opposed to the Ford or Nissan. Will the mileage be better than the 19 city, 24 hwy? Will it cost less than the average of $60,000? Will it be a hybrid?