March 11th, 2019 by Kyle Field
Tesla just took to its official blog to announce that it would not be closing as many stores as it had initially planned and would be raising prices 3% on select configurations of the Model 3, S, and X, effective March 18th.
The news represents yet another drastic course correction that sets careers off on a different trajectory and destabilizes any semblance of peace across its fleet of retail stores. In its blog post announcing the change, Tesla said that, “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 news reads more like a stay of execution than a pardon, but surely comes as welcome news to the thousands of retail employees staffing its stores around the world that were left not knowing if they would even have jobs in the coming days or weeks after the company decided to close most of its stores.
Tesla opted to close the “stores that didn’t invite the natural foot traffic our stores have always been designed for.” These stores amounted to 10% of its stores that had been set up in locations that simply didn’t pan out as they had hoped, according to the blog post. 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. A further 20% of its retail stores will remain open, but will be subject to increased scrutiny as the company decides if they will fall under the knife or not in the coming months.
The move does not affect Tesla’s decision to move all purchases onto the internet, as the stores will simply shift to a policy of helping customers with their online purchases.
CleanTechnica spoke to several retail store employees after the news of Tesla closing retail stores went out and the sentiment was universally unsettled. Employees were not sure if they were going to have jobs at the end of the day, week, or month as news of stores closing rolled in. Whereas the atmosphere inside of Tesla’s factories and offices was “keep calm and charge on,” sales staff had a different expression on their faces. Yesterday’s news softens the blow to employees, but with the lingering uncertainty about whether or not their store is one of the 20% that could still possibly close.
Tesla is clearly iterating wildly as it attempts to find the balance of retail store spending and non-value-add overhead on a vehicle purchase, but these wild shifts in employee placement strategies leave their own employees, both former and current, up in the air. That’s a terrible feeling for anyone to have to experience, especially when the number fluctuates from 100% of its retail stores down to a more conservative, but still very large, 20% of stores.
The step backwards will come as a hit to customers as well, as Tesla will raise prices 3% on all S and X vehicles as well as all of the Model 3 configurations other than the $35,000 configuration to account for the remaining stores. The pricing change will go into effect on March 18th, giving potential customers a few days to pull the trigger at the lower price point and giving Tesla a demand boost as customers will surely flock to the website to configure and order a Tesla before pricing goes back up.
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