Tesla backtracks on store closures in 'startling' u-turn

Telsa now says it will keep most of its showrooms open, reversing a plan it had announced just weeks ago.

Elon Musk's electric car manufacturer Tesla Motors will cut seven percent of its workforce. Source: AAP

Tesla has walked back its plan to close nearly all of its showrooms, a sudden reversal of a plan announced only weeks ago.

Tesla now says it will "keep significantly more stores open than previously announced as we continue to evaluate them over the course of several months".

Tesla said it would still shift towards online-only sales but would be raising prices on most cars by about three per cent.

Tesla back tracks on store closures Source: The New York Times

It will keep the same price at its Model 3 at $US35,000 ($A49,500).

Tesla has 378 stores and service centres worldwide, including five in Australia.

Tesla concedes Model 3 is too expensive. Source: AAP

A Tesla Australia representative referred comment to the company's blog post, which didn't say what would happen to Tesla's Australia locations.

Gartner analyst Michael Ramsey called the reversal "startling" and said it undermines the credibility of Elon Musk and Tesla's management.

"How else can you view it except to see it as a remarkable example of lack of foresight or planning?" Ramsey asked.

"It's almost as if the decision was announced and made without any analysis of what the outcome would be."