Earlier quoted context omitted.
So presumably they are hoping many $35k buyers will be tempted by the $37k which presumably has a better margin for Tesla
At only $2,000 more I doubt it has a better margin. I think they just want more buyers to be happier with their purchase, while still providing the $35k option they promised for those who prefer to stick strictly to that price regardless of features.
If that's the case and the "bigger" battery costs nothing to Tesla, the $37k version has a higher margin if the enhanced interior features cost less than ~$2k.