No Joke: Tesla Motors Makes Profit But Kills 40 kWh Model S

tesla-model-s-roadHa ha. Fisker and Tesla joining forces. That’s a good one right? I thought so. But in some real Tesla news, the EV maker’s latest quarterly report was just released with is loaded with good news for investors, but a bit of bad news for EV advocates. Despite making a profit in the first quarter of 2013, Tesla is quietly killing off its most affordable vehicle, the 40 kWh Model S, and that’s no joke.

Tesla reported that it had sold about 4,750 Tesla Model S units in the first quarter, 250 more than they had predicted, allowing the automaker to reach “full profitability” according to Automotive News. This is certainly good news, and Tesla stocks have gone up 12% this year on news of strong sales and interest on the Model S.

Yet the cornerstone of Tesla’s electric vehicle plans was the 40 kWh Model S, which after tax credits could be had for around $50,000 (before a modest price bump). Unfortunately, interest in the low-end Model S, with an estimated 140 miles of range, accounts for only about 4% of Model S sales. As a result, Tesla is killing the 40 kWh option, and will instead focus on 60 and 85 kWh models.

Customers who already put down a deposit on a 40 kWh model will instead get one fitted with a 60 kWh battery, but it will be limited to using just 40 kWh of juice. Customers will have the option of freeing up the other 20 kWh, if they are willing to shell out another $10,000. What really sucks is that means the cheapest Tesla Model S is now more than $60,000, which seems to go back on Musk’s pledge to sell a $50,000 EV.

Then again, if it doesn’t make dollars and cents, Tesla probably shouldn’t try selling the 40 kWh Model S. But for EV advocates, it still stings. Let us know your thoughts in the comments below.

 Source: Bloomberg News


Christopher DeMorro

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.