2018 Tesla Model S and 2018 Tesla Model X
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.
Those lease obligations potentially add up to $1.6 billion currently and $1.1 billion until 2023, as tallied by the Wall Street Journal. And whether those numbers are directly involved or not, the company changed course, announcing late Sunday that it's not happening in such a sudden and comprehensive way.
According to the company's latest announcement. It's raising prices instead—on all but the Standard Range Model 3.
In a blog post, Tesla said it would keep "significantly more stores open than previously announced," and support the ability to produce the base-level $35,000 Model 3 by raising prices about 3 percent on other, higher-end models.
2017 Tesla Model 3, 2017 Los Angeles Auto Show
The latest announcement reverses those price cuts and most of the store closings.
Tesla announced that it has already closed the lowest-performing 10 percent of its stores. Some of those, in high-visibility locations, may be reopened, the company says. Another 20 percent of store locations are under review and have won a reprieve for "the next few months." Following that review, some more stores will close, and others will remain open, the company said.
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.
Now, to make ends meet, the price of other models will go up by 3 percent. Buyers with existing reservations have a week to place their orders before the new price increases take effect.
With that increase, the base price of the Mid Range Model 3 would rise $1,200 to $42,400 (all prices assuming the mandatory $1,200 destination and documents fee remains the same), for example, and the Long Range Dual Motor all-wheel drive Model 3 would rise from $48,200 to $49,610.
2017 Tesla Model X
The base price of the Model S would rise $2,406 from $80,200 to $82,570, and the base price of the Model X would jump from $89,200 to about $91,840.
Tesla cut the prices in response to falling tax incentives for its cars, after the company reached the cap on the credits last summer. The tax credit, for Tesla's sundown, dropped January 1, from $7,500 to $3,750. It's scheduled to drop to $1,875 July 1, and to end entirely next year.