In the early hours of Monday morning, Tesla employees got a surprising email from CEO Elon Musk. Less than two weeks after announcing that he was closing the company's retail stores and letting go the sales staff, it was time for an about-turn. 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. Additionally, a week from now, there will be price increases on all of its vehicles with the exception of the standard range Model 3. The email to employees was also followed by a public-facing blog post.
Musk referred to some of the closed stores as being "in such difficult or obscure locations, only Sherlock Holmes could find them." Such a criticism could not be leveled at Tesla's now-closed store in Washington, DC, located in the city's newest and poshest downtown retail location; perhaps this store was one that suffered from "low apparent demand generation."
Despite this possible reprieve for the thousands of retail workers at Tesla, Musk's email and the blog post state that sales will remain online only and that the stores will exist just to show people how to order a car "on their phone in a few minutes."
The reason for the volte-face was not spelled out, but it paints a potentially worrying picture of corporate governance at the electric car OEM. Last week, The Wall Street Journal reported that most of Tesla's retail landlords had been given no notice as to the termination of leases, many of which had no cancellation clauses, thus exposing the company to a host of potential lawsuits.
What is clear is that Tesla sales in 2019 have been disastrous. InsideEVs, a publication close to Tesla, tracks US electric vehicle deliveries, and, according to its numbers, January and February deliveries were down by around 80 percent compared to the months leading up. 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.
Meanwhile, the spate of executive departures at Tesla continues unabated. The day after Tesla sent out invitations to the unveiling of the Model Y crossover, VP of Engineering Michael Schwekutsch announced his sudden departure. Schwekutsch was responsible for overseeing Tesla's drivetrain technology.