Tesla to raise vehicle prices, keep more stores open

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Tesla said it has closed around 10% of its stores in areas of low footfall, but said a small number of those would now be reopened.

Tesla's announcement late February that it will close stores and move entirely to online sales has already been cause for a minor uproar, as news emerged about mammoth lease obligations it may need to keep.

"Depending on their effectiveness over the next few months, some will be closed and some will remain open".

However, Tesla clarified that a price hike will only apply to costly models such as variants of Model 3, Model S and Model X.

But in a blog post on on Sunday, Tesla said that while all sales worldwide will be done online, it has chose to keep "significantly more" stores open than previously announced.

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.

Tesla said on Sunday it has "been closely evaluating every single" retail location.

However, Tesla has now begun to back away from the full implementation of its scheme, with "significantly more stores" to remain open.

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Elon Musk noted then that Tesla has moved from "production hell" to "delivery logistics hell", referencing the company's struggles to get the vehicles it was producing to delivery centers where they can be picked up by their owners.

The company continues its shift to toward online-only sales, but now says it won't close as many stores as originally thought. Tesla will offer vehicles for test drives at its stores at the buyer's request, and there will be a small number of cars in inventory for those who want to drive off in their new auto the same day.

Tesla Chief Executive Elon Musk has until the end of the day on Monday to explain why he should not be held in contempt for recent tweets that US securities regulators say violated a September fraud settlement.

The price of the recently launched $35,000 Model 3 will stay as is.

The store-closing reversal shows that Tesla had second thoughts about shuttering the stores and whether buyers would make such a large purchase without a test drive.

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

The company didn't give a reason for its decision to reverse course.

Still, Tesla shares were largely unaffected, with the stock gaining 3 per cent on Monday to $US290 a share, maintaining its market value at more than $US50 billion, much to the chagrin of the army of "short-sellers" who are betting on the company failing.

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