---
title: "Tesla Model 3 Might Already be Cannibalizing Model S Sales"
description: "Is the Model S still relevant if you can get a Model 3 for half the price?"
date: "2017-05-04"
modified: "2017-05-04"
authors:
  - name: "Eric Brandt"
    link: "https://www.thedrive.com/authors/eric-brandt"
url: "https://www.thedrive.com/article/9963/tesla-model-3-might-already-be-cannibalizing-model-s"
categories:
  - "News"
  - "News by Brand"
  - "Tesla News"
tags:
  - "compact"
  - "Electric Vehicle"
  - "Elon Musk"
  - "model 3"
  - "model s"
  - "new cars"
  - "sedan"
  - "Tesla"
---

# Tesla Model 3 Might Already be Cannibalizing Model S Sales

![](<https://www.thedrive.com/wp-content/uploads/images-by-url-td/content/2017/04/tesla-1.jpg>)
*\<em\>www.thedrive.com\</em\>*

After reporting a lot of revenue with no profits to show for it, Tesla is assuring investors that the upcoming Model 3 sedan [will not make the flagship Model S irrelevant.](<https://www.reuters.com/article/us-tesla-results-idUSKBN17Z2GK>) In a conference call, Tesla CEO Elon Musk said, "We have seen some impact of Model S orders as a function of people being confused" about the model hierarchy in Tesla.

In other words, fewer people are ordering the Model S because they’d rather spend much less money and get a Model 3 instead. Apparently, the confusion is that the Model 3 is an upgrade over the Model S by virtue of being newer. While they might be similar to the untrained eye, the two cars are quite different.

The [Model S](<https://thestore.thedrive.com/>) is a full-size luxury liftback with greater performance potential while the Model 3 is the entry-level compact luxury sedan. One of the biggest differences between the two cars is the price tag. The Model 3 will start at $35,000 with the aging Model S starting at almost double that at $68,000 (both before incentives). Performance-wise, the Model 3 should be able to keep up with in-class competitors like the BMW 3-Series, but don’t expect to see it [smoking ZL1s](<https://www.thedrive.com/news/8448/watch-a-tesla-model-s-p100d-whip-a-modified-camaro-zl1-with-a-10-7-second-quarter-mile>) on the drag strip any time soon.

This confusion among potential Tesla buyers begs the question of how many current Model S owners would have bought the Model 3 if it was available at the time they bought their car. If the Model 3 is the hit Tesla needs it to be, they’re going to have to make some changes to the Model S to keep it different and relevant in the Tesla lineup.

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[Twitter](<https://twitter.com/brandt004>)