Tesla introduces a cheaper Model S — starting at $66,000

Elon Musk and his Tesla Motors Inc. have long promised the world a more affordable version of their much-admired battery-electric Model S supercar.

Now it’s here, but it isn’t the Model 3 — and it isn’t all that affordable.

Tesla will begin selling a new Model S 60, a slower version of the four-door plug-in sedan. The new vehicle will contain many of the safety and performance features included in the Model S, which has an average transaction price of more than $100,000. But the new Model S 60 will cost as little as $66,000. An all-wheel-drive version will sell for $71,000.

Tesla said the new car will have a range of 200 miles between chargings, and a top speed of 130 miles per hour. It will accelerate from zero to 60 mph in 5.5 seconds.

A software update will be available that will allow customers to upgrade their 60s to get greater range, the company said.

Tesla emphasized that the new 60s are effectively even less expensive when buyers factor in the available tax incentives and estimated fuel cost savings. Tesla calls the new car “competitive” and puts the car “in the $50,000 range” in terms of real cost.

“This is a way to conjure up some new interest in the Model S,” which has now been available for four years, said Jessica Caldwell, senior analyst at Edmunds.com.

The Model S’ price tag has “been a roadblock for some people” and the new 60 version is a way to get “people interested in a cheaper Tesla, although it’s still not really that cheap,” Caldwell said.

A $66,000 price tag is more than twice the average selling price of a new car in the U.S. market, she noted.

This isn’t the first time that Tesla has offered a Model S with the 60 powertrain. That vehicle was offered at a price of $69,000 but was discontinued in 2015 as more buyers tended toward the faster, more powerful and more expensive battery-motor combinations.

But this version of the Model S 60 is likely to enjoy a better reception because Tesla’s sales and reputation have grown in the last two years, said Michelle Krebs, senior analyst at AutoTrader.com.

“What Tesla needs to do is make more of its vehicles accessible to a wider audience” before the Model 3 arrives, Krebs said. “They’ve got to build some additional volume.”

In the first quarter, Tesla produced 15,510 vehicles, including 12,851 Model S vehicles and 2,659 units of its Model X sport utility vehicle. The company says it expects to deliver 80,000 to 90,000 vehicles for all of 2016.

Tesla and Musk this spring electrified the auto industry by unveiling the long-awaited Model 3, which the company has said will sell for $35,000, before government rebates and tax incentives, and have an all-electric range of more than 200 miles.

The company received more than 350,000 deposits of $1,000 for the new car, which is said it will begin building soon in its Fremont, Calif., factory and begin delivering in late 2017.

The Model S 60 might appeal to some of those would-be buyers of the Model 3 who don’t want to wait for the Model 3 to arrive, said David Whiston, an analyst with the investment research firm Morningstar Inc.

Tesla could be “hoping some people will go ahead and buy a Model S now and add a Model 3” later, Whiston said.

Musk, chief executive of the Palo Alto-based car company, disappointed some eager early adopters of the Model 3 by announcing that the Model 3 at its base price will not qualify for the free, long-distance charging available to the more expensive Teslas at the company’s nationwide supercharger network.

The new Model S 60s, it appears, will be able to take advantage of those free charging stations.

UPDATES:

1:41 p.m.: This article was updated with additional details.

This article was originally published at 9:30 a.m.