Tesla clearly hadn’t properly run the numbers before making its announcement about Model 3 pricing, and a decision to close most of its stores.
It now says it will keep “significantly more stores open than previously announced”. It’s hard to judge the significance of this, as Tesla didn’t tell us how many stores it was planning to close in the first place, nor does it have a concrete number now—other than to say 20% of its 300 or so stores are under review.
Keeping those stores open will come at a cost:
As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% on average worldwide. In other words, we will only close about half as many stores, but the cost savings are therefore only about half.
Potential Tesla owners will have a week to place their order before prices rise, so current prices are valid until March 18th. There will be no price increase to the $35,000 Model 3. The price increases will only apply to the more expensive variants of Model 3, as well as Model S and X.
No doubt Tesla fans will remain happy about all this. But I wonder how potential customers will feel about having to foot the bill for Tesla’s retail strategy?