Tesla Motors, Inc.'s New Model S: An Aggressive Pricing Move

On Thursday, electric-car maker Tesla Motors announced it's bringing back a lower-cost, 60-kilowatt-hour variant of the Model S. The move highlights the company's growing market ambitions for the vehicle.

The Model S. Image source: Tesla Motors.

Meet Tesla's new Model S60 and 60D

It was just last April when Tesla stopped selling

But the Model S 60 is back -- packed with a whole lot more value and a lower price. This time around, Tesla's Model S 60 starts at $66,000, includes lifetime access to Tesla's Supercharger network (for which buyers used to be charged $2,000 extra), gets 210 miles of range instead of 208, and -- here's the biggest benefit of all -- comes with a 75 kWh battery. The larger battery is available for a $9,000 fee, anytime after delivery, with a simple over-the-air software update.

Image source: Tesla Motors.

In addition to reintroducing a 60 kWh Model S, Tesla also announced a 60D, the same model with dual-motor all-wheel drive. The 60D pricing begins at $71,000.

Along with Tesla's Thursday announcement of a more aggressively priced Model S, the company stopped selling its Model S 70 and 70D. Technically, of course, Tesla's Model S60 and 60D are the same vehicles, since both the 70 models and the 60 models actually sported a 75 kWh battery -- at least since May, when Tesla began including 75 kWh batteries

Why?

Tesla's decision to introduce a lower-cost Model S isn't defensive; the company has been clear that demand for its vehicle is thriving. Before Tesla began delivering its Model X SUV late last yearpreviewed its lower-cost Model 3

Tesla factory. Image source: Tesla Motors.

Tesla's recent pricing moves are more likely an attempt to grow sales of the popular vehicle even higher. In 2015, Tesla delivered about 50,400 Model S vehicles -- up from about 31,700 in 2014. In 2016, Tesla predicts it will sell 80,000 to 90,000 Model S and X vehicles combined, but a slow Model X production ramp means Model S deliveries are key to hitting this range.

Overall, bringing back the Model S 60 makes sense. I even predicted

The article Tesla Motors, Inc.'s New Model S: An Aggressive Pricing Move

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