Hundreds of thousands of drivers have been eagerly awaiting a less expensive, battery-powered Tesla electric car.
It's here. It's just not as affordable as they hoped.
Tesla will start to sell a lower-priced version of its Model S, it announced in a statement. The Model S 60 will start at $66,000. The Model S 60D, the all-wheel drive version, will start at $71,000.
"It's still a luxury vehicle," Bruce Belzowski, managing director of the University of Michigan Transportation Research Institute's Automotive Futures group, tells The Christian Science Monitor in a phone interview. "Only when you drop it down into the thirties will it become a more mass-market vehicle that's reasonable for most people to consider."
That just-right vehicle is the long-awaited Model 3, which Tesla said will start at $35,000 and drive 215 miles per charge – double the range of any of its competitors. The fanfare the Model 3 received was unprecedented. Tesla received more than 325,000 pre-orders for the sedan within a week of its unveiling in March, according to the Los Angeles Times.
But the vehicles won't be delivered until at least 2017. The Model S 60 and 60D, then, are a taste of what's to come, as well as further pressure on traditional automakers to keep up.
The current Model S started at $70,000.
The new S 60 is somewhat of a “throwback,” writes USA Today. Tesla offered a sedan that started at $69,000 from 2012 to 2015. The Model S 60 will cost even less and perform better. It will drive about 210 miles per charge, accelerate from zero to 60 in 5.5 seconds, and reach a top speed of 130 mph.
The S 60D will drive even farther and faster. Tesla will offer upgrades a driver can pay for that will increase the range of the vehicle even more, according to the Los Angeles Times. Though they don't have the appeal or the affordability of the Model 3, the S 60 and 60D will serve a broader market, Matt DeLorenzo, managing editor of Kelley Blue Book, tells the Monitor.
"When you look at how expensive a full on Tesla Model S at $100,000, not to mention its ludicrous speed, it's a pretty rarified market," says Mr. DeLorenzo. "The market for premium electric cars is finite."
"Everyone who can afford one of those has one," adds DeLorenzo. "Now Tesla is finding it really has to move down the market."
All said, the starting price of a new Tesla four-door is twice as much as the average transaction price for any new car, according to Kelley Blue Book. However, offering an electric vehicle for less is an indication that Tesla is serious about selling to a broader market, according to DeLorenzo.
"If they didn't have a model like this, they might see a fall-off in sales," he says. He is eager to see the percent the Model S 60 and 60D are of Tesla's total sales.
Even if the Model 3 isn't out yet, and its four-door or Model X SUV are out of the reach of most buyers, Tesla has forced traditional automakers to keep up with it, Belzowski and DeLorenzo agree.
"Tesla continues to be disruptive because they keep coming out with new ideas," says Belzowski, mentioning the remote updates and upgrades it offers. "They are continuing to experiment with different ways of using and selling things through the vehicle."
"Auto manufacturers really haven't done that in the past."
DeLorenzo agrees Tesla is a disrupter, but said a much more significant force that receives less press is California's Zero Emission Vehicle Program, which requires a certain percentage of automakers' sales to be vehicles that don't emit any greenhouse gases. If an automaker sells less than its goal of electric vehicles in the Golden State, it must reduce its sale of gas-powered vehicles too. Fortunately for Tesla, all of its vehicles are electric, so it can sell its credits to the rest of the auto industry.