After a whirlwind Twitter week, Elon Musk announces Tesla is closing all stores worldwide, to make $50,000 car viable

Twitter tesla bubble

Tesla co-founder and CEO Elon Musk. Source: AP/Robyn Beck.

After a week of Twitter scuffles with the US Securities and Exchange Commission, Elon Musk has announced the launch of the long-awaited Tesla Model 3, and the closure of all of the manufacturer’s physical stores.

The Model 3 is a low-cost version of Telsla’s electric vehicle, available for $US35,000 ($49,300). Previously, according to CNBC, Musk has said making Tesla cars cheaper could potentially ruin the company.

However, in the announcement today, Tesla said “to achieve these prices while remaining financially sustainable, Tesla is shifting sales worldwide to online only”.

“You can now buy a Tesla in North America via your phone in about one minute, and that capability will soon be extended worldwide,” the statement said.

In order to remove the need for a test-drive, customers will be able to return a car within seven days, or before they have driven 1,000 miles, whichever comes first.

“Quite literally, you could buy a Tesla, drive several hundred miles for a weekend road trip with friends and then return it for free,” the statement said.

Some stores with high turnover will remain as galleries, the statement said.

But, according to reporting from CNN Business, Musk acknowledged in a call with journalists “there will be some reduction in headcount”.

He said producing the vehicle at that price point is “excruciatingly difficult” and will require some layoffs, adding “I wish there was some other way”.

Musk told the world there was news on the way via his preferred medium of obscure Twitter posts.

On Tuesday, in a string of vague tweets, Musk said: “Thursday 2pm”, then “California”, then “Some Tesla news”.

According to CNN Business, Tesla then halted some orders ahead of the announcement.

There are five Tesla stores in Australia, which will likely be closed.

It’s not currently clear how long it would take online vehicle orders to reach international customers, or if the returns policy will be the same. The Model 3 is expected to be available in Australia as of mid-2019.

This news comes after a tumultuous couple of weeks in the life of Musk.

On February 19, he found himself in hot water with the SEC, again, as he tweeted that Tesla will make 500,000 cars in 2019.

His agreement with the SEC, which also saw him step down as chair of Tesla, mandates Musk must seek board approval for any social media posts containing information deemed material to shareholders.

He quickly corrected the figure, clarifying that he “meant to say annualized production rate at end of 2019 probably around 500k”.

However, according to the Wall Street Journal, the SEC asked the Manhattan Federal Court to hold Musk in contempt of court over the tweets.

Tesla claimed the tweet was based on public information, made available in the company’s earnings transcript, which states the volume would be between 350,000 and 500,000 cars.

Of course, Musk couldn’t help but goad the SEC, saying they “forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing …”

The eccentric entrepreneur also attracted attention this week by changing his name on Twitter to Elon Tusk, plus an elephant emoji.

Ahead of today’s announcement, he changed his name back, and changed his picture one of the Model 3.

NOW READ: Elon Musk continues to warn of AI threat, claiming it will become an “immortal dictator”

NOW READ: “There’s too much blind faith”: Is it time to stop idolising entrepreneurs like Elon Musk?


Notify of
Newest Most Voted
Inline Feedbacks
View all comments
2 years ago

The SEC needs to wind its neck in. Elon has achieved extraordinary things but he isn’t a saint and that is part of his appeal.

Frank Speaking
Frank Speaking
2 years ago
Reply to  Michael

Head of the SEC has a career history in the oil Industry with extensive contacts and his wife’s business is involved with the oil industry. Potential conflict of interest

2 years ago
Reply to  Frank Speaking

Thank you for that interesting info. It makes more sense now. Although Elon is his own worst enemy at times. Why he would keep poking the bear is beyond me.