Model S and X No Longer a Priority for Tesla

Elon revealed during the Q2 earnings call that going forward Model S and Model X are no longer a priority for Tesla.

The company is no longer focused on Model S and X due to comparatively low volume: Tesla only delivered 17,650 Model S and X vehicles in the second quarter, while Model 3 deliveries were at a record 77,634 — outselling all of its gas-powered equivalents combined.

Tesla’s priorities for the future are Model 3 and Model Y, which are expected to sell a combined two million units annually. (Model S and X are only expected to sell up to a combined hundred thousand units.)

In response to a question about Model 3 cannibalizing Model S and Model X sales, Elon admitted that it is happening to an extent. He also cited a main reason for reduced sales for Tesla’s prior flagships being that the market is expecting a major refresh to be released sometime soon, which Musk confirmed once again is not the case. An interior overhaul that brings the S and X interior more in-line with Model 3 and Model Y as well as Tesla’s upcoming lineup was widely expected to happen this year.

Model S and Model X received the most significant updates since the cars were unveiled this past quarter, with a RAVEN refresh that incorporated the more efficient powertrain from Model 3 as well as hundreds of minor improvements including an improved suspension. Musk had emphasized that the cars are significantly better now than when they were originally introduced.

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Although robotaxis will be far more valuable to Tesla, we hope that the Model S and Model X remain in the lineup and continue offering innovative features that simply can’t be offered on Model 3 or Y due to price and volume targets. We don’t anticipate features like the motorized door handles on the S or the Falcon Doors on the X will ever be offered on the 3 or Y, and we are excited to see where Tesla continues to take its high-end lineup in the future.

Elon joked that Tesla can’t spell “S3XY” without Model S and X, and called it a main reason that the cars remained in production.

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