Tesla backtracks on recently-announced plan to close its stores

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The electric auto maker said in a statement late Sunday that prices for most models worldwide would go up by about 3% after it chose to "keep significantly more stores open than previously announced".

In addition to the e-mail to all employees, Tesla also published a blog post Sunday night, conveying these details to shareholders and the general public.

In a February 28 blog post on the Tesla website, it was stated that the electric-automaker would close most of its 378 stores worldwide.

Musk has promised a $35,000 price tag for the Model 3 since the vehicle was first unveiled in 2016. However, cars will still be available for test drives at stores at the potential Tesla owner's request.

Here's the memo in its entirety. 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. Meaning, most of these stores are in such hard or obscure locations, only Sherlock Holmes could find them!

And in preparation for the launch event for the electric SUV, Tesla has now made it official: adding the Model Y to the main menu of its website and an accompanying page inviting visitors to register to view the Livestream event on March 14, 2019 (US time). Some of those stores that have closed may now reopen with a smaller crew. Another 20 percent of stores are still under review and may close over the coming months, depending on their effectiveness. All things considered, this seems like a reasonable compromise between current and future customers.

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Tesla said the increase is to cover the cost of keeping more of its physical stores open.

To make up for this, Tesla will raise the prices of its high-end vehicles by about 3 percent on average, as it strives for profitability. He said the sooner-than-expected arrival of a US$35,000 Model 3 likely reflected the need to replenish cash after paying off a US$920 million convertible bond and added that weak USA sales early this year also probably hasn't helped.

The step backwards will come as a hit to customers as well, as Tesla will raise prices 3% on all S and X vehicles as well as all of the Model 3 configurations other than the $35,000 configuration to account for the remaining stores. The policy allows new buyers to drive the auto for 1000 miles or seven days.

Some stores will keep a small inventory of cars on hand so purchasers can drive away in a new auto immediately.

All Tesla sales will still be conducted online, and the showrooms will remain to show clients how to order a Tesla on their phone.