Tesla To Shut Most Stores Worldwide

Elon Musk Moves Tesla Shares With Cryptic Tweeting About News To Come

Tesla said Thursday in a letter to employees say the company would close most of its dealerships and leave only a handful left in "high traffic areas".

The California-based firm announced plans to close many of its physical stores on Thursday in order to sell its new Model 3 vehicle online at a lower cost.

Scott Gairns, managing director of Sophus3, which held its annual digital retail summit in London this week, said that Tesla's move towards purely online sales "will force the whole industry to accelerate the move to online vehicle sales".

Musk said in a press call that long-time reservation holders will have priority for deliveries of the new version.

Production issues, higher prices and other delays have blighted the delivery of the Tesla Model 3 since 40,000 customers pledged an interest to buy the auto following its official unveiling in 2016.

For existing Tesla customers, maintenance would shift to mobile fix crews. But it's been impossible to actually buy the long-promised, $US35,000 ($49,006) base model of the vehicle that so many were hoping for to help them enter the electric future.

"The important thing for customers in the United States to understand is that, with online sales, anyone in any state can quickly and easily buy a Tesla", the letter said.

Musk initially wrote that Tesla would produce 500,000 vehicles in 2019, a bold prediction given that the company only made 350,000 previous year.

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Shares of Tesla fell 3.4 percent after hours.

To help lower the price the firm plans to close showrooms and is switching to an online-only sales model. But customers who reserved the Model 3 at that lower price have waited almost three years since Musk first promised it. Soon, the only way you'll be able to purchase a Tesla will be through your phone or a computer.

The company attributed the potential loss to one-time charges and said it would likely be profitable in the second quarter.

The store closures will come on top of a decision to cut 3,150 jobs, or about 7 percent of Tesla's workforce, announced earlier this year.

Tesla is now offering two software packages; regular autopilot, at a cost of $3,000 (£2,270) which will allow for automatic steering on highways or full self-driving ($5,000) which takes over more functions, such as changing lanes, navigating junctions and taking exits.

Tesla CEO Elon Musk teased in a series of Twitter posts Wednesday that "some Tesla news" would be released Thursday at 5 p.m. ET.

While announcing the new models, Musk also revealed that it will now only offer its cars for sale online.

On the press call yesterday, Musk admitted that Tesla would not yet be profitable in the first quarter of 2019-a reversal from the rosy prediction he'd shared as recently as January 30, when he said the company would record profits in every quarter going forward. The SEC alleged Musk misled investors after concluding he did not have the money to pull off the deal.

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