Tesla Bringing Back The Model S 60

Tesla Motors announced this morning that it is bringing back the Model S with a 60 kWh battery, a version of the car it offered from 2012 until last year. In 2015, it made a 70 kWh battery standard equipment on the least expensive Model S. Then recently, it introduced a new wrinkle.

All cars now come with 75 kWh batteries, but the battery in the entry level car is software limited to 70 kWh. An upgrade to the full 75 kWh capacity is available at extra cost. That same strategy will be used with the new Model S 60. It will actually come with a 75 kWh battery, but will be software limited to 60 kWh unless the customer chooses to upgrade for more money.

Base price of the new entry level Model S is $66,000 before state, federal, or local incentives. It will have at least 200 miles of range, according to the company. Tesla says customer demand is what drove its decision to bring back the Model s 60. “We’ve heard from a number of people who would like to buy a Model S, but can more easily afford it only at a lower price point,” said Tesla spokesperson Alexis Georgeson.

That’s a little odd, considering that when the 60 kWh battery was in the lineup previously, fully 90% of customers opted for the more expensive 85 kWh battery with greater range. But if Tesla says demand is there, it presumably has done its market research to justify its decision.

The new Model S 60 is priced just $10,000 or so more than what many think a fully loaded Model 3 will sell for. Even though the Model 3 will start at $35,000, customers will have many options to choose from, including a larger battery, dual motors, a sunroof, premium wheels, upgraded sound systems, and optional wheels. All those goodies could easily push the price of a Model 3 to $55,000. Add in the Ludicrous Mode upgrade Elon Musk says will be available and the gap between a top tier Model 3 and an entry level Model S will be quite small.

It will be interesting to see how the market responds to this news from Tesla. Will people with Model 3 reservations opt to buy a full size Model S now instead of waiting up to 2 years for a Model 3? That’s a delightful conundrum to have.

Source: CNBC  Photo Credit: Tesla Motors