Friday 01 March 2019 3:37 pm | Updated: Monday 03 June 2019 1:32 am

Tesla shares drop as Elon Musk outlines plan to close stores and move sales online in bid to cut car prices

Tesla is set to close most of its physical locations as it shifts worldwide sales online, it said today, sending shares down almost eight per cent to 295p.

The stores will not close immediately but are expected to “wind down” over the next few months, with the exception of stores “in high-traffic locations”.

The stores exempted from the closures will not be used for sales but rather as showcases, galleries and information centres. Tesla currently has 20 stores in the UK, with nine located in London.

With the option to test drive disappearing with Tesla stores, the company has announced that it will allow purchased cars to be returned within seven days or at most 1,000 miles for a full refund.

The move comes in an effort to make Tesla cars more affordable, with the standard Model 3 pricing in at $35,000 (£26,427) as a result of the change.

The company has said its range of vehicles will fall in price by about six per cent.

At the same time as the store closures were announced, Tesla added the Model 3 Standard Range Plus to its offerings, which will cost only $2,000 (£1,510) more than the regular Model 3.

The store closures are the latest development in chief executive Elon Musk's bid to drive costs down and reach a broader audience.

Back in January, Musk announced that Tesla would be shedding seven per cent of its workforce to drive the price of the Model 3 down.

In an email regarding the job cuts, Musk said that the company needed “to reach more customers who can afford our vehicles” to become profitable.

Tesla customers in North America will be the first to start buying Tesla vehicles online, and customers in the rest of the world are expected to be able to do the same soon.