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.

  • Lorenzo Heh. The major powers, military or economic, set up these regulators for the smaller countries - the big guys do what they want, and always have. Are the Chinese that unaware?
  • Lorenzo The original 4-Runner, by its very name, promised something different in the future. What happened?
  • Lorenzo At my age, excitement is dangerous. one thing to note: the older models being displayed are more stylish than their current versions, and the old Subaru Forester looks more utilitarian than the current version. I thought the annual model change was dead.
  • Lorenzo Well, it was never an off-roader, much less a military vehicle, so let the people with too much money play make believe.
  • EBFlex The best gift would have been a huge bonfire of all the fak mustangs in inventory and shutting down the factory that makes them.Heck, nobody would even have to risk life and limb starting the fire, just park em close together and wait for the super environmentally friendly EV fire to commence.
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