Elon Musk says reduced prices ‘shouldn’t have been offered’ as he confirms Tesla will raise the price of its high-end cars on Monday
- Elon Musk confirmed Tesla ‘shouldn’t have’ cut the price of its high-end vehicles
- Musk said the price of vehicles and Autopilot ‘will revert to normal’ on Monday
- Comes after Tesla revealed in a blog post that it will raise car prices by 3 percent
- Global increases apply to more expensive versions of Model 3, Model S, Model X
- Tesla says this will allow it to keep ‘significantly more stores open’ than thought
Elon Musk has confirmed that Tesla made a mistake by announcing it would slash the prices of its top-tier vehicles.
In a series of tweets on Tuesday, the billionaire tech mogul explained that Tesla ‘shouldn’t have offered’ the lower prices on the Model S and Model X vehicles.
Tesla is now making a major u-turn and will on Monday reinstate normal prices for its cars, aside from the base price Model 3.
This means most of its vehicle prices will increase by about 3 percent.
Scroll down for video
Less than two weeks after saying it would shift all of its sales online in effort to cut costs, Tesla now says it will keep physical stores open and instead raise the prices of its vehicles. File photo
‘In retrospect, lower price shouldn’t have been offered,’ Musk said in a tweet.
‘Was done so because some simply couldn’t afford it. Prices revert to normal on Monday.’
Outraged users had reached out to Tesla after purchasing the firm’s Autopilot software, which cost $5,000 before the discounted prices were released.
-
Flight-hailing startup Blackbird, dubbed ‘Uber for planes’…
Toyota’s self-driving lunar microbus: Firm unveils concept…
From diver’s paradise to plastic nightmare: Colgate, Nestle…
Is the iPhone in trouble? Demand for Apple’s flagship…
Share this article
Users had been told that they if they purchased the software alone, it would come at a discount. Tesla has yet to release its full Autopilot software.
Then, on February 28th, Tesla announced that Autopilot would cost just $3,000 – thousands of dollars cheaper than what consumers had originally paid.
The price of Autopilot will ‘revert to normal’ on Monday as well, according to Musk.
Additionally, Musk explained that Tesla is ‘still closing stores,’ as it plans to shutter about half of the stores it initially announced were closing.
On Monday, Tesla issued a blog post saying it will keep most of its physical stores open and instead raise the prices of a slew of its vehicles.
To make up for this, Tesla will raise the prices of its high-end vehicles by about 3 percent on average, as it strives for profitability.
The recently unveiled $35,000 Model 3 – Tesla’s cheapest vehicle yet – will not be affected by the price hike.
TESLA’S CHEAPEST MODEL 3 VEHICLE YET
Tesla has finally launched the $35,000 Model 3.
Range: 220 miles
Top Speed: 130 mph
Acceleration: 0-60 in 5.6 sec
Tesla is also offering the $37,000 Model 3 Standard Range Plus, which boasts:
Range: 240 miles
Top Speed: 140 mph
Acceleration: 0-60 in 5.3 sec
The company said late Sunday that it would now be closing only about half as many stores than initially planned in a widely criticized move earlier this month to cut overhead and shift its whole distribution network online.
‘Over the past two weeks we have been closely evaluating every single Tesla retail location, and we have decided to keep significantly more stores open than previously announced,’ the electric carmaker said.
‘As a result Tesla will need to raise vehicle prices by about 3 percent on average worldwide.’
Separately, Chief Executive Officer Musk has until the end of the day on Monday to explain why he should not be held in contempt for recent tweets that U.S. securities regulators say violated a September fraud settlement.
The case is the latest major challenge by authorities to Musk’s leadership as Tesla seeks to make good on his promises to Wall Street that it will soon by consistently profitable and will not need more capital.
The three percent increase on its top-end cars would be the first hike in prices after a series of cuts over the past year aimed at offsetting a reduction in green tax credits and the impact of rising tariffs overseas.
Tesla said the worldwide price increases would apply to the more expensive versions of the Model 3, Model S and Model X, and that there will be no price increase to the $35,000 Model 3.
‘The 3 percent price increase announcement still indicates … strong demand,’ said Ivan Feinseth, an analyst with Tigress Financial Partners.
The carmaker said potential buyers can place orders until March 18 at the old prices. Currently, the Model S and Model X models are priced starting at $79,000 and $88,000 before savings, respectively.
Shares of the company, among Wall Street’s most volatile in recent months, were roughly flat in early trading on Monday.
Tesla will unveil its highly-anticipated Model Y crossover in LA later this week, Elon Musk said at the beginning of the month
Cost savings from store closing will be only about half the expected amount as the company will close only half the number of stores planned, it said.
A few stores in high-visibility locations that were closed because of low throughput would be reopened with a smaller Tesla crew and would carry fewer cars in inventory.
Separately, Bloomberg reported on Monday that Tesla is in discussions with Chinese battery maker Contemporary Amperex Technology Co Ltd on a deal for the production of rechargeable batteries for the Model 3.
In January, sources told Reuters that Tesla had signed a preliminary agreement with China’s Tianjin Lishen to supply batteries for its new Shanghai car factory.
The talks come as Tesla looks to localize battery cell production and push forward with the 500,000-vehicle-capacity Shanghai plant, expected to be completed in May.
Source: Read Full Article