Things are constantly changing at Tesla as the company juggles prices and content in its quest for sales and profitability. As of January 1, the company’s cars are no longer eligible for the full $7,500 federal EV tax credit. For the next 6 months, they will qualify for only half that — $3,750. In response, Tesla lowered prices on all of its cars by $2,000.
So, it seems counter intuitive that Tesla has now decided to discontinue the 75 kWh battery for its Model S sedan and Model X SUV as of January 13. The announcement came in a tweet from Elon Musk on Wednesday and gives customers only 5 more days to order a car with that battery. Raising the price of its large cars hardly seems like a strategic way to boost sales, so the company must have something else in mind to encourage demand.
Starting on Monday, Tesla will no longer be taking orders for the 75 kWh version of the Model S & X. If you’d like that version, please order by Sunday night at https://t.co/46TXqRJ3C1
— Elon Musk (@elonmusk) January 9, 2019
The Verge reports that a Tesla spokesperson declined comment on the announcement, which means there is plenty of speculation about what the elimination of the 75 kWh battery means for the company going forward. In the short term, it means the base price of the Model S will jump from $76,000 to $94,000 come Monday. Similarly, the price of a Model X goes up from $82,000 to $97,000. This at a time when competing electric SUVs from Jaguar and Audi selling for $75,000 or less are already on the market or due to arrive shortly.
Has Tesla taken leave of its senses? Probably not, but in the absence of hard information, there is a lot of speculation. The staff here at CleanTechnica has been tossing around some of those questions while lazing beside our rooftop salt water pool at CT Central. Bear in mind, our thoughts, although informed by years of reporting on all things Tesla, may or may not be accurate. By Monday, Tesla may have made other announcements that add considerably to our understanding of the situation.
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Are New Batteries Coming?
The Model S and Model X use 18650 battery cells produced by Panasonic. The Model 3 uses the newer 2170 battery cell made by Tesla at its Gigafactory 1 in Nevada. The Model 3 is currently offered with two battery sizes — a 75 kWh Long Range unit and a 62 kWh Mid Range option. Eventually a 50 kWh Standard Range model will be offered, but that option is not yet in production. When it is, the Mid Range choice will probably be eliminated.
Tesla has almost always offered a choice of batteries in its cars. How likely is it that its large vehicles will now go forward with only one battery available? That seems unlikely, but we’ll see.
When Tesla introduced the Model 3, there was no mention of battery size, no kWh to decipher. Elon Musk eventually responded that, indeed, most humans don’t think in kWh and it made more sense to just talk miles when communicating with the masses. Is Tesla going to do the same with the S & X now? The answer may be contained in a somewhat cryptic Twitter response by Elon Musk to Alistair Gray, who asked, “Are you moving away from battery sizing in a similar sense to how Model 3s are sold ie Long Range, Performance etc?” Musk’s answer was “Yes.”
More Questions Than Answers
There are a couple of moving pieces to the Tesla puzzle at the moment. The 2170 battery cells are believed to be more energy efficient and less costly to manufacture than the older 18650 cells. People have speculated for some time that eventually the newer cell design would find its way into the battery packs for the larger cars.
The Model S has been on sale since 2012, with no dramatic styling changes except for a new front end treatment (even though thousands of changes have been made through the years in a quiet manner). Rumors of a redesigned Model S have been swirling for years. Presumably, a new version of the Model S would be able to take advantage of the manufacturing lessons learned by Tesla since 2012, making it less costly to produce and therefore more profitable.
Battery prices have continued to fall every year and it is believed Tesla is already at or slightly below the $100 per kWh level with its latest 2170 cells. Could Tesla reduce the price of its large cars with the 100 kWh battery packs and add a 120 kWh or 125 kWh battery pack that uses 2170 cells as the new premium price offering? Such a large battery in a redesigned, more efficient chassis could push the range of the car closer to 400 miles. That would also better differentiate the Model S from the Model 3 (and the Model X from the coming Model Y).
Finally, Tesla is scheduled to begin rolling out its Version 3 Superchargers soon. Could the company have new battery packs and upgraded battery management systems that would allow its cars to obtain an 80% state of charge in 15 minutes or less?
We don’t know the answers, but will continue to share the latest Tesla news with our readers as soon as it is available. If you are interested in owning a Tesla but find the Model 3 a bit snug for your tastes, this may be the ideal time to order a Model S 75 at an affordable price. Is Tesla planning changes to that car? Almost certainly so. It is constantly making improvements to all its cars. As Elon says, the cars coming off the line today are the best Teslas ever made and the best time to buy a Tesla is now, as always.