(Bloomberg)—Tesla Inc. stores that closed earlier this month in a hasty move that surprised employees, customers and Wall Street are already starting to re-open.
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In a blog post late Sunday night, Tesla announced it decided to keep “significantly more” stores open than announced 10 days earlier in a cost-cutting move. As a result of the less-drastic wind down of its retail presence, the company plans to raise vehicle prices by about 3 percent on average worldwide. There will be no price hike for the $35,000 version of the Model 3 sedan.
Tesla’s blog post didn’t give a rationale for why it decided to backpedal on the store closings. The company reported having $1.6 billion in operating lease obligations in its latest annual report, with $1.1 billion due by 2023.
Robert Taubman, the CEO of Taubman Centers, said at a conference last week that he thought it was possible Tesla might rethink its decision to abandon most of its brick-and-mortar retail locations. He told investors Tesla had been negotiating deals with his company in the previous couple weeks.
“It’s a company with a viable balance sheet that is going to owe a lot of landlords a lot of money,” Taubman said. “This is a decision that obviously has been made somewhere at the top and is now being transmitted down to all of us.”
To contact the reporter on this story: Dana Hull in San Francisco at [email protected] To contact the editors responsible for this story: Craig Trudell at [email protected] Andrew Pollack
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