Tesla Motors Inc. began taking orders Wednesday for a new entry-level version of its Model S. The vehicle is equipped with more range and features than the one it replaces. The move comes as the electric-car maker aims for a steep increase in 2015 sales, which it hopes to attain in part through the introduction of a sport-utility vehicle, the Model X, later this year.
The new base model is called the 70D, named after the 70 kilowatt hour (kWh) battery pack that gives the new entry-level Model S 240 miles per charge, up from the 208 miles in the previous 60D version.
The 70D also gets the standard all-wheel drive that was introduced in the 85-kWh and high-performance versions of the critically acclaimed luxury electric car. The extra juice give the car a blazing 514 horsepower, replacing the 60D's 380 hp. That's almost the same muscle as a Porsche 911 Turbo at half the price. The new entry-level Model S costs $75,000 excluding shipping costs, about $4,000 more than the version it replaces. It's eligible for federal and state green-car incentives.
Tesla is hoping to kick-start sales of its lowest-priced Model S. The car has seen lackluster demand as wealthy buyers opt for the 270-mile-range 85 kWh Model S, which starts at $85,000.
The Fremont, California, automaker has said it plans to deliver 55,000 cars this year, a 74 percent jump from the 31,655 vehicles it delivered to customers last year. This is part of the company’s ambitious effort to reach annual sales of 500,000 cars by 2020, mostly from sales of a $35,000 Model 3 due out in 2017. The introduction of the Model X SUV should boost sales starting in the latter half of the year.
"While extended battery range and added all-wheel drive are important for the base Tesla model, the reality is the vehicle appeals to the wealthiest of the American population due to its price point," said Akshay Anand, auto analyst at vehicle valuation and automotive research comapny Kelley Blue Book. "The Model X debut may also cause potential 70D or Model S shoppers to wait around a bit and see which vehicle they like more."
Tesla said Friday it delivered 10,030 cars worldwide in the first three months of the year, including about 1,400 cars whose deliveries were delayed until the start of the year, giving the company nearly a fifth of its 2015 delivery goal. Tesla needs to average about 15,000 cars per quarter for the rest of the year to hit its target.
Sales performance is vital to the company right now. Tesla is a growth stock, which means investors are buying shares based on the company meeting certain benchmarks, such as gross margin, progress in the construction of a battery factory in Nevada, and, most crucially, growing demand for its products.
The announcement of the new entry-level Model S sent Tesla’s stock price up 2.14 percent to $207.61 in Wednesday morning Nasdaq trading. Shares are up more than 8 percent since the start of the week after investors piled into the stock following Friday’s first-quarter sales announcement.
Tesla has started to report three-month unit sales at the end of every quarter instead of including the data in its financial earnings reports, which come out more than a month after the end of every quarter. This gives investors an early view of the company’s quarterly deliveries, but it still means Tesla only discloses sales numbers four times a year.
Other automakers release monthly sales data, giving their investors a closer view of how well cars are selling. Tesla also doesn’t disclose regional sales data, making it difficult to gauge global sales performance.