Tesla Inc. (NASDAQ: TSLA) announced on Sunday that it efforts to keep more stores operating, the Company will raise the prices of its vehicle models.
The electric vehicle manufacturer announced in a blog post that it will raise the prices of its vehicles by 3% on average worldwide. In other words, Tesla will only close about half as many of its stores, but the cost savings are therefore only about half.
Tesla said over the past two weeks it has been evaluating its retail locations and decided to keep more stores than previously anticipated. The Company currently has approximately 378 stores and service centers operating worldwide. Tesla did not disclose which stores or how many it intends on closing.
The Company said it recently closed 10% of sales locations. The stores Tesla closed didn’t see natural foot traffic that they were designed for. Tesla noted that these locations were stores that it would have closed regardless even if in-store sales made up its entire sales model. Tesla also mentioned that stores that saw traffic were closed due to low throughput, but will eventually will be reopened with a smaller crew.
In addition, the Company said that there are another 20% of locations that are also under review, and depending on their effectiveness over the next few months, some may close or remain open.
Tesla’s decision to possibly close more locations is a move to increase its online sales traffic rather than coming into a physical location. The Company notes that potential owners will simply be able to model their vehicle and place it simply in minutes.
Tesla said that potential owners will have a week to place their orders before prices rise, so current price plans are valid until March 18th. The Company said there will be no price increased to its USD 35,000 Model 3. The price increase will apply to its more expensive variants of the Model 3, as well as the Model S and X.
Vehicles will be available for test drives at stores per request of the potential owner. Stores will also carry a small number of cars in inventory for customers who wish to purchase their vehicle on the spot.