Tesla Raises Car Prices By 3% To Keep Stores Open

American electric car maker Tesla has raised car prices by an average 3 percent, worldwide. The company also revised its earlier plan to close all physical retail stores. Tesla updated that the current prices will stay only until March 18. After that, the hike will take effect.

Tesla also decided to retain some of the physical stores it had planned to close and will reopen some of the closed retail centers.

However, Tesla clarified that a price hike will only apply to costly models such as variants of Model 3, Model S and Model X. Price increase will not affect the $35,000 Model 3, the company added.

Review leads to reversal

The carmaker took the decision to keep more stores open after a long review of “every single Tesla retail location,” said a blog post of the brand.

Tesla had closed 10 percent of stores recently. According to the blog, “these are stores that would have closed anyway.”

The company previously announced that February 28th as the deadline to shut the stores to shift entirely into online sales.

The carmaker had claimed complete transition to online sales would allow it to slash prices by 6 percent, and that is how the company would sustain sale of the $35,000 Model 3.

According to Tesla's blog, the preference for conducting sales online will continue and said buyers in stores would be trained to order a Tesla on phone, which is a rapid process.

“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,” the blog added.

Tesla spokeswoman Emily Findlay also said there is nothing more to add beyond what the blog post had mentioned.

Generous return policy

Tesla justified online ordering saying that its generous return policy will compensate test drives as buyers can return a car with seven days or 1,000 miles.

Tesla announced some stores closed in high visibility locations will be reopened with a fewer number of staffers. They will keep a limited number of cars so that customers can drive away with a new vehicle immediately.

Tesla has been making efforts to cut costs. In January CEO Elon Musk announced that it is cutting down 7 percent of its 45,000-strong workforce.