Tesla changes mind on dealership closures and price reductions

by | Mar 14, 2019

American electric car manufacturer Tesla has now backtracked slightly on plans to close almost all of its stores and reduce prices dramatically.

Only a few weeks ago, on February 28th, the EV manufacturer stated that it would be ‘winding down many of our stores’ over the next few months, with the aim being to focus on online-only sales.

The plan was to keep ‘a small number of stores in high-traffic locations’ remaining, as ‘galleries, showcases and Tesla information centres’.

However, Tesla have now changed their mind somewhat, with a blog post stating that the company would keep ‘significantly more stores open than previously announced’.

Tesla had also announced discounts that are now going to be far less significant than originally planned. The reduced prices will now be higher by around three per cent on average worldwide.

The original plan to close dealerships was in an attempt to reduce costs, enabling Tesla to bring the price of the Model 3 hatchback down. The plan was to reduce the price of the car to just $35,000 (£27,000) in the United States. However, the price for the UK models had not yet been revealed.

Other Tesla models to receive price drops include the Model S saloon and the Model X MPV. However, as part of the change of plan, the new prices will be higher than originally planned. Tesla stated that the $35,000 price of the Model 3 won’t change entirely, but ‘the price increases will only apply to the more expensive variants of Model 3, as well as Model S and X’.

Whilst these new price changes haven’t come into action yet, Tesla buyers are able to take advantage of the original discounts until 18th May 2019.

Tesla have yet to announce the number of stores that will remain in action. However, they have said that they will be reopening some of the stores in high-visibility areas, that had already been closed.

In a statement, Tesla said: ‘When we recently closed 10 per cent 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 per cent 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.’