Elon Musk's surprise Tesla announcement

6:14 p.m. ET, February 28, 2019

Tesla stores are closing and some people will lose their jobs

Musk dropped this shocker on the call just now:

We will be closing some stores and there will be some reduction in headcount because of that.”

Musk added that “it’s excruciatingly difficult” to produce the Model 3 at a $35,000 price point and remain financially sustainable. There has to be layoffs, he said. “I wish there was some other way.”

Tesla's press release says that shifting all sales online, combined with other ongoing cost efficiencies, will allow the company to lower the prices of ALL of its vehicles by about 6%.

To make up for the new online-only purchase policy Tesla is also making it easier for people to return their cars. Buyers will have 7 days or 1,000 miles during which they can return the car for a refund.

That's an extremely generous return policy for an automaker, but then again every other manufacturer has dealers that let shoppers test drive a car before buying it.

6:33 p.m. ET, February 28, 2019

Elon Musk didn't actually tweet the news he teased on Twitter


Literally the car you can get for $35,000.”

That's how Elon Musk described the Tesla Model 3 on a call with reporters, says CNN Business' Jackie Wattles.

Although he teased the news on Twitter, Musk did not tweet about it. He did, however, change his Twitter icon to a photo of the Tesla Model 3.

The news was shared via Tesla's official Twitter account:

6:21 p.m. ET, February 28, 2019

Tesla shares dip more than 3% after hours

Tesla's (TSLA) stock was at more than $320 per share in after hours trading around 4:30 pm ET, before the announcement came out. But by 6:00 pm ET, it had fallen to about $310, down more than 3%.

5:29 p.m. ET, February 28, 2019

Tesla's $35,000 Model 3 is finally available to order

The $35,000 Tesla Model 3 is now a real thing.

This is the car people have been waiting for since Tesla revealed the Model 3 in April, 2016. For this money, you get 220 miles of driving range and a zero to 60 time of 5.6 seconds. You can also get a version with more speed and 240 miles of range for about $2,000 more.

In order preserve its profit margins, Tesla said that it's shifting all of its sales to online and closing "many" of its stores. But Tesla is also making it easier for people to return. Buyers will have 7 days or 1,000 miles during which they can return the car for a refund.

5:00 p.m. ET, February 28, 2019

We're taking guesses about what's coming at 5pm ET

There's an office pool and everybody here at CNN Business is in. The only thing we can be sure of is that somebody will buy doughnuts for the newsroom tomorrow.

There are two camps. The first is led by our resident car expert, Peter Valdes-Dapena, who thinks this will be an announcement about Tesla’s self-driving car capabilities. He speculates Tesla (TSLA) will unveil a software update that will make its vehicles fully autonomous -- something he's hinted at in the past.

Another constituency expects that this will be the surprise debut of Tesla's long-awaited Model Y SUV, which is a cheaper version of the Model X built on the Model 3 sedan platform.

Stay tuned.

4:37 p.m. ET, February 28, 2019

Tesla halts some orders ahead of Musk's mysterious announcement

We're half an hour away from Musk's announcement and it appears some orders on Tesla's website are halted. Visitors are being redirected to this teaser page:

Tesla
Tesla

4:28 p.m. ET, February 28, 2019

Elon Musk teases Tesla announcement

Elon Musk is teasing a Tesla announcement on Twitter, as regulators continue to scrutinize his use of the social media platform.

He said the news will come Thursday at 2 pm PT (5 pm ET).

Musk caused a stir on Wednesday when he posted a cryptic message about the impending news, and Tesla's (TSLA) stock initially jumped about 5%. The company's shares were finished 2.2% higher ahead of the planned announcement.

It's not clear whether Musk will announce something newsworthy.

4:07 p.m. ET, February 28, 2019

Musk is in trouble with the SEC

Earlier this week, the Securities and Exchange Commission has asked a federal judge to hold Tesla CEO Elon Musk in contempt for violating a settlement deal reached last year.

Musk tweeted on February 19 that "Tesla made 0 cars in 2011, but will make around 500k in 2019." Hours later, Musk sent a follow-up tweet indicating that the company will actually deliver just 400,000 cars this year.

Although Musk corrected his mistake, regulators scolded Tesla's billionaire CEO because he "once again published inaccurate and material information about Tesla to his over 24 million Twitter followers."

Musk called SEC oversight "broken" on Twitter. He has until March 11 to file a formal response with the court.

Recap: Here's our previous blog from Tuesday.

4:07 p.m. ET, February 28, 2019

Model 3 loses key Consumer Reports recommendation

Last week, Consumer Reports pulled its recommendation of Tesla Model 3, citing reliability issues with the car.

Tesla (TSLA) pointed to its overall customer satisfaction rating from the magazine and said it has corrected many of the problems found in the survey:

"We take feedback from our customers very seriously and quickly implement improvements any time we hear about issues."

It said the survey was conducted from July through September, "so the vast majority of these issues have already been corrected through design and manufacturing improvements, and we are already seeing a significant improvement in our field data."