Tesla backtracks on recently-announced plan to close its stores

The electric car-maker revealed it was backing off its plan to close all of its US stores in a blog post on Monday.

On Sunday, the auto maker said that after evaluating the retail stores' locations, it had chose to "to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months".

"While the reversal to keep stores open does call into question the soundness of the initial decision, we view this as the right course of action and think that test drives are still an important part of the sales process until the electric vehicle penetration rates increase meaningfully".

Tesla stores are usually found close to city centers in popular locations, rather than alongside out-of-town dealerships.

The only specific contained in Tesla's latest missive is a 3 percent increase to the price of Model S and X vehicles, and "more expensive variants" of its Model 3.

When CEO Elon Musk announced the debut of the base, $35,000 Model 3, he said it was only possible by achieving cost savings by closing stores and laying off their employees.

The price bump is set to go into effect on March 18, so shoppers still have a week to lock in a Tesla at current prices. Tesla also pulled the trigger on closing a few high-profile stores that were closed due to low throughput and, having re-evaluated the decision, the company has opted to re-open the stores, with reduced staffing.

Separately, a NY attorney on Monday announced that Tesla's former chief of security has filed a whistleblower complaint with the U.S. Securities and Exchange Commission. Another 20 percent of Tesla locations are under review, the company added.

The company continues its shift to toward online-only sales, but now says it won't close as many stores as originally thought. The stores will keep a small inventory on hand for people who want to drive away immediately.

The carmaker is continuing with its plan to expand its online sales.

Tesla is an electric auto and energy company based in Palo Alto, California, that is worth about $49 billion.

Musk was required as part of a settlement reached with the SEC a year ago - over "misleading" tweeted claims about having secured funding to take the company private - to have social media posts containing material content approved before sending them.

The three percent increase on its top-end cars would be the first hike in prices after a series of cuts over the past year aimed at offsetting a reduction in green tax credits and the impact of rising tariffs overseas.

Tesla is still sticking with its plan for all orders for its vehicles to take place online - even in its brick-and-mortar outlets.

Shares of Tesla Inc. edged up less than one per cent in Monday trading to US$291.

  • Eleanor Harrison