The Real Deal New York

Tesla will close stores, lay off staff as carmaker goes online [Updated]

CEO Elon Musk said the decision was made to cut costs necessary to reduce its cheaper Tesla 3 model, priced at $35K
March 10, 2019 12:00PM

Elon Musk (Credit: Getty)

UPDATED, March 11, 10:50 a.m.: Tesla is closing down its dealerships and will sells its cars solely online, the company said this week.

The decision was made to cut costs in order to release its mass-market vehicle, the $35,000 Model 3, according to TechCrunch. The move is among several cost saving measures that will allow the company to lower all of its vehicle prices by 6 percent.

“There’s no other way for us to achieve the savings required to provide this car and be financially sustainable,” CEO Elon Musk said.

Musk did not disclose how many of its dealerships would close, but said that some would remain open as showrooms or information centers. All vehicles will now be sold online, and test drives have been scrapped. Instead the company said customers can return the vehicle within seven days or 1,000 miles for a full refund.

“We’re going to make it super easy to get a refund, like one-clickrefund,” Musk said.

The announcement comes after the company opened 27 new dealerships across the country in the last quarter of 2018, according to The New York Times.

However, in a Bloomberg report from March 11, the company backpedalled its announcement and said it would increase the pricing of its vehicles by an average of 3 percent as a means of keeping many of its stores open.

[TechCrunch, NYT] — David Jeans

Update: This story has been updated to include new details about Tesla’s store closure plan.