Tesla's 'amateur hour' U-turn on store closures has analysts shaking their heads

Tesla's 'amateur hour' U-turn on store closures has analysts shaking their heads

In its blog post announcing the change, Tesla said that, "we have chose to keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months". Tesla hasn't announced how many stores will remain open, but the company says it will be reopening "high visibility locations that were closed due to low throughput", along with a handful of other stores that are now being evaluated for effectiveness.

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

Tesla will raise the price of all its cars, with the exception of the new entry-level Model 3 Standard, by "an average" of 3% worldwide.

Legal experts have said the SEC could now pursue multiple avenues, including a higher fine, imposing further restrictions on Musk's activities or removing him from Tesla's board or helm.

Tesla made a controversial decision last month when it announced that it would be closing all of its stores and going online only for sales of its EVs.

A decision by Telsa to back away from plans to close its retail outlets worldwide is good news for Vancouver, says electric-car analyst Matthew Klippenstein.

Now, to make ends meet, the price of other models will go up by 3 percent.

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"To backtrack from the online only strategy to us is a sign that may indicate Tesla did not see a positive reaction to orders post the announcement".

Tesla has cut thousands of employees since the start of the year as the carmaker continues to overhaul its operations to hit profitability. The 7-day/1,000 mile test drive policy will still apply as well, though test drives will still be available in stores. It called for Tesla's general counsel and a newly designated in-house securities law attorney to pre-approve any written statements about Tesla that could be material.

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. Tesla notes that all sales will still be made online; anyone wanting to buy in a store will simply be shown how to use the online system.

The company said it would await the results of a further review on the usefulness of physical locations, and only cut the original price of the vehicle be "about 3%".

The blog post doesn't give a rationale for why Tesla is backpedaling.

Justin Hammond, who bought a Model S 75D just eight week prior to the cost reductions branded the move as "terrible" and said he no longer trusted the brand.

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