Orders and deliveries of theTesla Model S are reaching a fever pitch, except for one: the lowest-spec, 40 kWh battery pack. So Tesla has decided to nix the entry-level model. But as with all things Tesla, it's a bit more complicated.
The decision to eliminate the Model S with the 40 kWh battery was based purely on demand. According to the automaker, a scant 4 percent of pre-orders were for the $52,400 (after $7,500 federal tax rebate) 40 kWh battery option, which Tesla maintains "is not enough to justify production of that version."
But here's the twist.
Customers that pre-ordered the 40 kWh model will still get what they ordered, but instead their new Model S will come equipped with the larger 60 kWh battery, but with its output limited to 40 kWh via the software. That tweak will reduce range from the claimed 230 to 160 miles, but as a consolation prize, the Model S will retain the 60 kWh model's bump in performance. That means a better 0-60 mph time (5.9 vs. 6.5 seconds), a higher top speed (120 vs. 110 mph), with 302 horsepower and 317 pound-feet of torque, up from the entry-level Model S' 235 hp and 310 lb-ft of twist.
But here's the real kicker: If you want to free up the extra 20 kWh by removing the software limiter, it'll cost you a cool $10,000 -- the same price to go from the 40 to 60 kWh model. That makes it the world's most expensive software upgrade, but bully for Tesla for at least making it an option for both original and second-hand owners.
In addition to the announcement of the battery change, Tesla says that sales of the Model S exceeded the target set in its mid-February shareholder letter, with sales blowing up to 4,750 units. With that extra bump (Tesla expected 4,500 units in its prior estimate), the math leads Tesla to amend "its Q1 guidance to full profitability, both GAAP and non-GAAP."
And one last interesting tidbit from Tesla: The automaker has been covertly installing the Supercharger hardware on all its 60 kWh models, which was normally an upgrade on the standard car. That means that mid-range Model S owners will be able to take advantage of Tesla's Supercharger network, offering free electricity at its growing number of stations scattered across the east and west coasts. According to the automaker, "Tesla is taking a slight cost risk that ultimately all customers will want to buy the Supercharger upgrade... Even for those that never drive long distances, this will improve the resale value of their car."
