Tesla backtracks on dealership closures and price drops

Time 10:51 am, March 11, 2019

ELECTRIC car brand Tesla has re-evaluated its plans to introduce drastic price drops and close all its stores to focus on online-only sales.

On February 28, the American EV maker announced that it would be ‘winding down many of our stores’ over the next few months, with ‘a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centres’.

However, a blog post from Tesla has now announced that it will keep ‘significantly more stores open than previously announced’ and that the reduced prices of its cars will now be higher by ‘about three per cent on average worldwide’.

The decision to close dealerships was originally made to reduce costs and enable Tesla to reduce the price of the Model 3 hatchback from $44,000 (circa £33,200) to just $35,000 (£27,000) in the United States, although the price for UK models has not yet been confirmed.

The smallest Tesla was not the only one to see a price drop, though, with the Model S saloon and Model X MPV both receiving drastic price cuts.

Previously, a Model S P100D cost £131,305, but now renamed Ludicrous Performance, it costs £83,300, an incredible saving of £48,005.

The new prices have not been confirmed but Tesla has said that the price of the $35,000 Model 3 won’t change but ‘the price increases will only apply to the more expensive variants of Model 3, as well as Model S and X’.

The price changes aren’t immediate, though, and Tesla buyers have until May 18 to take advantage of the discounts that were originally announced.

The number of Tesla stores that will remain has not been confirmed either, but the brand has said it will reopen some it has already closed in high- visibility areas.

The company 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.’

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Rebecca Chaplin's avatar

Rebecca has been a motoring and business journalist since 2014, previously writing and presenting for titles such as the Press Association, Auto Express and Car Buyer. She has worked in many roles for Car Dealer Magazine’s publisher Blackball Media including head of editorial.

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