Faced with slumping sales and increasing financial stresses, Tesla has shifted course several times in the last two months, deciding to keep stores after saying it would close most and cutting prices before raising them again.
Now, in the latest course correction, Tesla says it will end online sales of the long-awaited $35,000 version of its Model 3 sedan, its lowest-priced offering, and make other changes that will effectively raise the price of the car for many customers.
The move comes just over a month after Tesla announced that the $35,000 version was finally coming to market.
“The constant shifting of pricing and options is really confusing and frustrating for customers,” Mike Ramsey, a Gartner analyst, said Friday. “People buy a car for one price, and a few weeks later it’s selling for a different price.”
In a blog post late Thursday, Tesla said customers wanting the $35,000 version of the Model 3 would have to make the purchase by phone or in person at one of its stores.
The cheapest Model 3s ordered online will now include Tesla’s Autopilot driver-assistance system and a longer battery range, features that increase the price to $39,500. The blog post said Tesla was making the changes to “simplify vehicle choices and to make Autopilot more affordable.” Such a configuration would previously have cost $40,500, it said.
A Tesla spokesman said the change would allow the company to produce one version of the Model 3 and use software to limit the battery range and turn off features such as heated seats for customers who wanted the $35,000 model. A longer range and additional features will be switched on in the $39,500 car, known as the Standard Plus model. Previously, Tesla planned to put a smaller battery pack in the basic model and a larger one in the Standard Plus, the spokesman said.
Tesla’s announcement also said it would begin leasing the Model 3, but would not offer customers the option to buy the cars after their leases expired, a departure from the typical industry practice and its own policy on other models.
Tesla said it aimed to upgrade Model 3s returned after a lease to allow them to drive themselves, with no human at the wheel, and be deployed in a driverless taxi fleet. The company acknowledged that the technology for driverless taxis was still in development and would need to be approved by safety regulators before such a business could begin.
The latest moves coincide with a slump in Tesla’s sales, especially in the United States. In the first quarter, the company delivered about 63,000 cars, a 31% drop from the fourth quarter. Elon Musk, the company’s chief executive, has also said Tesla has experienced delays and difficulties starting up deliveries of the Model 3 in Europe and China, and will report a loss in the first quarter after producing profits in the final two quarters of 2018.