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Tesla to increase prices to avoid store closures

The price hike will not affect the US$35,000 version of the Model 3

Tesla has announced that it will be raising the prices on some of its vehicles by around 3% on average worldwide.

Last month, the company said it would be winding down many of its stores and moving to online-only sales in order to pass the savings along to our customers.

“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 company said on its blog.

“When we recently closed 10% of sales locations, we selected stores that didn’t invite the natural foot traffic our stores have always been designed for. These are stores that we would have closed anyway, even if in-store sales made up our entire sales model. A few stores in high visibility locations that were closed due to low throughput will be reopened, but with a smaller Tesla crew. In addition, there are another 20% of locations that are under review, and depending on their effectiveness over the next few months, some will be closed and some will remain open.”

The company said that after the re-evaluation, the company will only close about half as many stores as it planned, but the cost savings are therefore only about half.

Potential Tesla owners will have a week to place their order before prices rise, so current prices are valid until March 18. There will be no price increase to the US$35,000 Model 3, the company added. The price increases will only apply to the more expensive variants of Model 3, as well as Model S and X.

The company clarified that all sales worldwide will still be done online, in that potential Tesla owners coming in to stores will simply be shown how to order a Tesla on their phone in a few minutes.

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