Tesla has raised prices on some of its electric cars and removed its cheapest vehicle from the online ordering system, the company announced Thursday. The changes come just over a month after it made good on its promise to start selling a $35,000 Tesla Model 3 with fewer features and reduced range per charge.
The company says it will now start bundling its semi-autonomous Autopilot feature, which used to cost $3,000 at the time of the car’s purchase, as standard. This is combined with a price hike, so the $37,500 Model 3 Standard Plus now costs $39,500.
Tesla has also made the decision to stop offering the $35,000 version on its website, even though the price point was a key promise in the buildup to the car’s release in July 2017. The Model 3’s ultra-low price, relative to the Model S and X, was billed as a way of bringing electric cars to the mass market, alongside the upcoming Model Y compact SUV and pickup truck.
Spokespeople from Tesla clarified to Inverse that the $35,000 car will not be subject to these price rises, but that unlike other vehicles it will not include Autopilot as standard. The car will include Autopilot-based safety features like automatic braking. Tesla has also simplified its manufacturing process so the $35,000 version of the car is just a software-limited version of the $39,500 version, as it found that it was selling six times as many cars under the $39,500 variant.
Tesla Model 3.
The $35,000 car has always been something of a pain point for Tesla. CEO Elon Musk wrote in May 2018, as the company struggled to manufacture enough premium Model 3s, that immediately shipping the cheapest version would cause Tesla to “lose money and die.” Musk promised the company would ship the car around six months after it reached a production rate of 5,000 cars per week, which it achieved in July 2018.
As the big launch approached, Tesla took drastic measures. The company announced plans to lay off seven percent of its staff at the start of January, following an expansion the previous year of 30 percent. Tesla announced the cheaper model at the end of February, while also announcing the closure of almost all of its stores. This decision was partially reversed two weeks later.
As part of Thursday’s announcement, Tesla also announced plans to offer a Model 3 lease for a small down payment. The announcement notes that drivers won’t have the option to buy the car at the end — the cars will eventually be used for Tesla’s autonomous fleet of taxis, which Musk stated will be unveiled on April 22.
