Tesla hikes prices, makes autopilot a standard feature

Also announced more changes for Model 3

By Daniel Shane, CNN Business
Tesla via CNN

Tesla CEO Elon Musk announced the new Model 3 version in a tweet early Friday, calling it a "lower cost, mid-range Tesla Model 3." It will have a starting price of $45,000. Previously the cheapest version of the Model 3 available started at $49,000.

(CNN) - Tesla is hiking prices as it adds autopilot as standard on most of its cars. It's also making it harder for customers to buy its cheapest model.

The company did not provide any specific reason for the changes announced on Friday, but it endured a tough 2018 after months of manufacturing hangups and delays in rolling out its best-selling Model 3.

Last week it reported a 31% fall in deliveries in the first three months of 2019 compared to the previous quarter, the single largest drop ever.

Even with the price hikes, drivers may actually be getting a better deal than before. Its Model 3 Standard Plus previously cost $37,500, plus $3,000 for autopilot. It will now sell for $39,500 including the assisted driving function.

It offers drivers basic self-driving features. It can assist motorists in changing lanes, parking and exiting freeways.

"Autopilot is very important because our data strongly indicates that the chance of an accident is much lower when autopilot is enabled," the company said in a statement.

"Autopilot also dramatically improves the quality of the driving experience, especially in heavy traffic, as thousands of our customers frequently describe online," it added.

More changes for the Model 3

The company is also making it harder for customers to buy the most basic version of the Model 3, which sells for $35,000 and doesn't come with autopilot. The vehicle will no longer be sold online — customers will have to call or visit a Tesla service center to order one. The Model 3 Standard and the Model 3 Plus are essentially the same vehicle. To give an advantage to customers willing to pay more for the Standard Plus, Tesla downgrades the abilities of the Model 3 standard, limiting the miles it can travel on a single charge, blocking some autopilot features and preventing drivers from turning on the seat warmers.

CEO Elon Musk had long promised a $35,000 version of the Model 3 but it only went on sale at the end of February. Musk said at the time that the company will have to close stores and lay off workers in order to sustain production of the cheaper car. He later backed off the store closure plans.

From Friday, customers will have the option of leasing, rather than buying, the Model 3. For a small down payment and a monthly fee, customers can choose any version of the car and select from a range of annual mileage options.

They'll have to hand the cars back when the lease ends so Tesla can use them in its planned driverless ride-hailing network.

Chris Isidore contributed reporting.

The-CNN-Wire ™ & © 2019 Cable News Network, Inc., a Time Warner Company. All rights reserved.