Tesla slips after saying it’s reducing the number of store closures and raising prices

  • Tesla on Sunday announced that it would reduce the number of store closures that it had previously announced.
  • The electric-car maker said that keeping more stores open will cause it to raise the price of its cars.
  • At the end of February, Tesla said it was moving to an online-only sales model and was closing most of its stores in order to slash vehicle prices by 6%.
  • Watch Tesla trade live.

Tesla was down 0.54%, trading near $282.60 a share early Monday, after the company hit the brakes on its plan to shutter its retail stores.

Last month, the electric-car maker announced it was shifting to online-only sales and closing most of its 378 retail stores. As part of its move to shift all sales online and other ongoing cost efficiencies, Tesla slashed the prices of its Model 3, Model S, and Model X vehicles by about 6% on average. Since then, shares have tanked as much as 14%.

On Sunday, however, the company said it would reduce the number of retail store closures.

“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,” Tesla said in a statement.

The company said that keeping more stores open will cause it to raise the price of its cars.

“As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% on average worldwide,” Tesla said. “In other words, we will only close about half as many stores, but the cost savings are therefore only about half.”

Telsa was down 6% this year through Friday.

Tesla

source
MI