Tesla raising prices after backtracking on store closures

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FILE- In this July 6, 2018, file photo, prospective customers confer with sales associates as a Model 3 sits on display in a Tesla showroom in the Cherry Creek Mall in Denver. Tesla is suffering one of its worst sell-offs of the year after announcing it would begin closing all of its stores in favor […]

(CNN Business) — Tesla will raise the price of its vehicles after going back on a recent decision to close most of its stores.

The electric car maker said in a statement late Sunday that prices for most models worldwide would go up by about 3% after it decided to “keep significantly more stores open than previously announced.”

Tesla (TSLA) had said less than two weeks ago that it would begin shutting most of its stores in a cost-cutting move designed to help reduce the price of its bestselling vehicle, the Model 3, to as low as $35,000.

As part of the plan, customers will instead have to buy Tesla vehicles online or by phone rather than in person at one of its hundreds of retail outlets.

Tesla still plans to sell the most basic version of the Model 3 for $35,000 even though the car is “excruciatingly difficult” to make at that price, according to CEO Elon Musk.

The 3% price increases announced Sunday will apply to the more expensive editions of the Model 3, as well as the Model S sedan and Model X crossover.

The higher prices will take effect on March 18.

Tesla has 378 stores and service centers worldwide. The company didn’t specify on Sunday how many of these it still planned to close or in which markets.

It said it will now “only close about half as many stores” as previously planned. Some of the stores that have already closed will be reopened with fewer staff members.

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