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.
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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