Tesla has announced it will only sell its electric cars online in an effort to finally deliver on its promise to sell a mass market sedan for $35,000 (£26,000).
CEO Elon Musk made the promise two years ago when the company released the Model 3 car as an alternative to its luxury offerings.
However, as recently as September, the average selling price exceeded $50,000 (£37,000).
The online sales shift will enable Tesla to lower all vehicle prices by an average of 6 per cent, including its higher-end Model S and Model X.
Some galleries or "information centres" will remain open in high-traffic areas.
"This is the only way to achieve the savings for this car and be financially sustainable," Mr Musk told reporters during a conference call.
"It is excruciatingly difficult to make this car for 35,000 dollars and be financially sustainable."
Although he said going online-only was a difficult decision, Mr Musk believes it is the right one.
"It's 2019," he said. "People want to buy things online."
Mr Musk predicted there was enough pent-up demand to sell about 500,000 Model 3s annually at the starting price of $35,000.
The store closures will come on top of a decision to cut 3,150 jobs, or about 7 percent of Tesla's workforce, announced earlier this year.
Despite the austerity measures, Mr Musk told reporters Tesla will lose money in the current quarter ending in March, backpedalling a statement he made last October when he pledged the company would remain profitable from that point on.
But Mr Musk said it was "likely" Tesla will bounce back with a profit during the April-June period.
Tesla's stock fell 3 percent in extended trading after the news came out.
