Tesla to stop sales of lowest-priced Model S, X cars

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Brand new Tesla Model S cars sit on front of a Tesla showroom on August 2, 2017 in Corte Madera, California. Tesla will report second-quarter earnings today after the closing bell.

Tesla will stop selling the lowest-priced versions of its Model S sedans and Model X SUVs from Monday, the automaker’s CEO Elon Musk wrote in a tweet late on Wednesday.

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The Model S and X are Tesla’s second and third major lines of electric vehicles, and are higher-priced lines compared to its newest Model 3. The 75 kWh version of the Model S and X that are being retired come with a battery that garners a range of 259 miles for the Model S, and a 237 miles for the Model X.

Higher-end versions of the S and X, equipped with a 100 kWh battery, will still be made and sold by Tesla, but at a higher price. The starting price for a new Model S will be $94,000 and the starting price for a Model X will be $97,000 from next week, according to Musk’s tweet-announcement.

Tesla did not respond to inquires as to why the S and X offerings were pared back, or whether any team reviewed Musk’s tweet before he shared it.

Retiring the lower-range Model S and X vehicles may push prospective customers to buy Tesla’s high-end Model 3 sedans instead.

A Model 3 with bells and whistles — like dual-motor all wheel drive, enhanced Autopilot, and a $5,000 performance upgrade package — will cost around $67,000, according to the company’s Model 3 configurator online.

Reducing the number of variations of Model S and X vehicles that Tesla has to make may help the company control costs, or reallocate materials and labor to other initiatives, such as Model 3 production at its packed car plant in Fremont, California or spare parts production in nearby Lathrop.