Tesla Discontinues Cheapest Model S, Further Widening Price Gap to Model 3

Soon the only rear-wheel-drive Tesla will be the Model 3.

byRob Stumpf| PUBLISHED Sep 25, 2017 11:57 AM
Tesla Discontinues Cheapest Model S, Further Widening Price Gap to Model 3

Tesla has discontinued its cheapest Model S option today, stripping not only the cheapest choice from consumers, but the last remaining rear-wheel-drive option as well. This decision, which comes only two months after Tesla discontinued its Model S equipped with the 60 kWh battery, has further separated the cost of the new Model 3 and its older and more expensive brother, the Model S.

Potential owners who have been eyeing the 75 kWh Model S in its rear-wheel-drive configuration had until Sunday to make their final decisions, as Tesla has officially removed the option from its online configuration tool on Monday morning. 

Effectively, Tesla has made all vehicles holding the Model S badge dual-motor cars, indicating that they will be available in all-wheel-drive configurations only. Tesla has discounted its dual-motor 75 kWh battery, meaning an increase in the entry price of a Model S from $69,500 to $74,500, or an additional $72 per month if financed.

The Model S has been Tesla's flagship sedan. Ever since CEO Elon Musk released his Master Plan, Part Deux, it was known that the Model S was intentionally more expensive in order to fund the creation of Tesla's overall goal: an affordable electric sedan for the masses. Such was accomplished when the Model 3 became available for consumers, and will further solidify its place in society as Tesla comes closer to meeting its production goals of over 40,000 units per month by 2018.

With the price increase for the lowest-cost Model S, Tesla has brought the price of the base Model S to just over twice the of the entry-level Model 3's sticker. On the top end of costs, Tesla has also recently reduced the cost of its 100 kWh battery options, significantly reducing the range of its Model S price points.

It's clear that Tesla is making a hard separation between that of the Model 3 and the Model S in terms of price. Even the most expensive Model 3 is topped out at $59,500, about $15,000 less than the base Model S, though this may change when the dual-motor and performance variants are released sometime in 2018. Until that day, the only rear-wheel-drive Tesla that one will be able to purchase is the Model 3.