Musk, 47, described the store wind-down announced on February 28 as a cost-cutting move that enabled Tesla to offer a long-promised US$35,000 version of the Model 3 sedan, the automaker's first mass-market vehicle.
Now, however, the company has backtracked, saying in a blog post that it has taken a close look at each of its stores and realized it makes more sense to keep a lot of them open. According to CNBC, which received a copy of the email, Musk wrote that the company would now be keeping many of its unclosed stores open, and would even reopen some of the now-shuttered locations.
The store-closing reversal shows that Tesla had second thoughts about shuttering the stores and whether buyers would make such a large purchase without a test drive. Some stores will also have a small number of cars available for immediate delivery. Additionally, a week from now, there will be price increases on all of its vehicles with the exception of the standard range Model 3.
In January CEO Elon Musk announced that it is cutting down 7 percent of its 45,000-strong workforce.
Tesla now claims it will only be closing stores that it would have already meant to close, no matter what.
In all, only half as many stores as initially planned will be closed. Although Tesla said it would concentrate on making up volume in Europe and China, neither of those markets appear able to take up the US' slack.More news: National Football League free agency rumors: Jets divided over Bell decision
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Also Monday, a NY attorney announced that Tesla's former chief of security has filed a whistleblower complaint with the U.S. Securities and Exchange Commission. Late last month, for example, Tesla at long last announced the long-overdue arrival of the $35,000 Model 3.
Musk was required as part of a settlement reached with the SEC previous year - over "misleading" tweeted claims about having secured funding to take the company private - to have social media posts containing material content approved before sending them.
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.
Shares of Tesla Inc. edged up less than 1 percent in Monday trading. As a result of that decision, the company says it will have to increases prices on most of its models.
Before the announcement, the cheapest Model 3 started at $42,900.
The move comes after Tesla said last month it was shifting all sales online to help lower prices by about six per cent on average, allowing it to achieve the relatively low starting fee for the entry-spec Model 3.
The blog post doesn't give a rationale for why Tesla is backpedaling.