At the end of a year ago, the company had almost 400 showrooms across the country, but has closed about 10 percent of those with the worst performance. Some of those, in high-visibility locations, may be reopened, the company says.
Cost savings from store closing will be only about half the expected amount as the company will close only half the number of stores planned, it said. All the rest appear safe, for now.
Unlike other carmakers, Tesla runs its own showrooms, rather than use a network of dealers.
Tesla Model 3 and X cars charging in an underground parking lot next to a Tesla store in San Diego, California, U.S., May 30, 2018.
The store-closing reversal shows that Tesla had second thoughts about shuttering the stores and whether buyers would make such a large purchase without a test drive.
Legal experts have said the SEC could try multiple avenues, including a higher fine, imposing further restrictions on Musk's activities or removing him from Tesla's board or helm. The policy allows new buyers to drive the vehicle for 1000 miles or seven days.
"How else can you view it except to see it as a remarkable example of lack of foresight or planning?".
The news reads more like a stay of execution than a pardon, but surely comes as welcome news to the thousands of retail employees staffing its stores around the world that were left not knowing if they would even have jobs in the coming days or weeks after the company chose to close most of its stores.
A Tesla spokesman declined comment Monday beyond the company's statement.
The company said it would await the results of a further review on the usefulness of physical locations, and only cut the original price of the auto be "about 3%".
The move comes after Tesla said last month it was shifting all sales online to help lower prices by about six per cent on average, allowing it to achieve the relatively low starting fee for the entry-spec Model 3.
Justin Hammond, who bought a Model S 75D just eight week prior to the cost reductions branded the move as "terrible" and said he no longer trusted the brand.
In addition to the e-mail to all employees, Tesla also published a blog post Sunday night, conveying these details to shareholders and the general public.