Tesla has been raising funds in order to ramp up mass production of its mysterious Model 3 in July. Despite several delays, co-founder and Chief Executive Officer Elon Musk confirms in its 4th quarter and full year 2016 Shareholder report that production is still on track.
While it seems that Tesla's vehicles line is expanding, the company suddenly announced on March 17 that people only have one month left to purchase a Model S 60 and 60D because the company will cease producing its 60kWh version.
The Model S 60 and 60D are currently Tesla's most affordable — or least expensive — electric vehicles with a price tag of $85,200 for a new inventory.
Goodbye, Model S 60 and 60D
Tesla offered the 60 and 60D versions of its Model S in June 2016 with the only significant change being its battery's 60kWh storage capacity, meaning shorter drives and more frequent charges. However, the vehicle is actually installed with a system-locked 75kWh battery that can be unlocked via an over-the-air update for a fee.
While there was demand for the more affordable versions, Tesla has concluded that removing the two models would be more advantageous for the company.
"One year ago, we introduced the Model S 60 kWh battery as a more affordable option to accelerate the adoption of electric vehicles. However, most customers ended up buying an equivalent to the Model S 75kWh. To simplify the ordering process for our customers, we will be removing the 60 kWh option from our lineup," Tesla stated.
Those who still want a Model S 60 or 60D, however, still have the chance to purchase their preferred vehicle until April 16, 2017.
Possible Reasons For Tesla's Decision
Tesla already stated the first and most obvious reason in its announcement: despite a more affordable offering for the Model S, more customers opted to purchase the Model S 75 and 75D. Those who ordered a Model S 60 or 60D ended up paying to unlock the battery storage limit and raise it to 75kWh. Tesla may have seen the S 60 and 60D as an unnecessary part of the line-up, hence, the decision to completely remove them.
Another possible reason for the move is because of the upcoming Model 3, which Tesla is marketing as the company's most affordable electric vehicle (that will be) in production. Mind you, the Model S 60 and 60D's price doesn't really hold a candle against Model 3's price tag of $35,000 before incentives since even the pre-owned Model S 60 and 60Ds range from $45,000 to $62,000.
No one will see the mass produced Model 3 on the road until 2018 but just keeping the more pricey options and leaving a still unreleased vehicle as an alternative option, is a sneak but good strategy to drive sales, especially since many people reportedly canceled their reservation for the vehicle when Musk didn't leave the Presidential Advisory Forum.