The DS and the local manager have little latitude in pricing or options. You must talk to someone in California or at the very least the regional manager.
This is one of those benefits of dealerships, they actually have real latitude in making decisions, because they have a local budget. With Tesla it is a giant bureaucracy that leaves their store staff in the unenviable positioning of having to explain and rationalize whatever command of the day comes from the (regional) HQ.
@SteveGray 's position is actually one that in normal conditions on TMC everyone would agree with. He is not asking for anything more than the car he ordered at the price he ordered it at. In all the long threads about product changes, this has been the constant where everyone has agreed as a baseline...
Now, when Tesla wants to not fulfill this part of the deal, some people are seeking legal and moral ways out for Tesla. Unbelievable. Well not really, that is just me feigning disbelief - I know some people really do think Tesla can do no wrong.
Customer may not always be right, but the moral of that sentiment isn't that they are always right - but that they should be made feel that way in all normal and reasonable circumstances. This is one of those normal and reasonable circumstances. The company can't deliver the product as ordered, so they deliver a better product at no cost to the buyer. There should be no question about this.
I would get it if the price delta was unreasonable - say a million dollars for the company, or having to give a Model S to a Model 3 orderer - but in all normal and reasonable circumstances this logic applies. Only in unreasonable situations should order cancellation or asking for extra be an option. This is definitely not one of those, given that the money they ask for is for hardware (the 75 kWh battery) that was always going to be in the car.
Legally, Tesla may well be in their power to cancel this order if the customer does not agree. Morally, I think they are way wrong even for asking about this, let alone forcing the customer's hand... But then, Tesla's ethics have been lost for ages now...