Tesla to drop cheapest Model S, the 60 and 60D, from lineup
- Author: Zachary Reyes Mar 21, 2017,
Mar 21, 2017, 11:10
Bottlenecks on Tesla Model 3 delivery is a topic already being discussed by Tesla.
Tesla is dropping the low end of its luxury Model S product lineup, months before the planned introduction of the less expensive Model 3. Tesla intends to use the net proceeds from the offerings to strengthen its balance sheet and further reduce any risks associated with the rapid scaling of its business because of the launch of Model 3, in addition to for general corporate purposes. The world needs that sort of new competitor. Onex Corp. (ONEX) and its affiliates said Friday that they agreed to sell USI Insurance Services to an affiliate of KKR & Co. "We are able to productionize things and move quickly in that regard", Roberston commented.
The Model 3 is all set to begin production in July 2017 and auto enthusiasts are expecting the vehicle to start shipping before the end of the year.
Tesla Motors has chose to axe two Model S variants: the entry-level Model S 60 and 60D.
Tesla produced nearly 84,000 vehicles in 2016 and plans to make half a million in 2018, then 1 million in 2020. Tesla wanted to be in a position to be able to test their updated semi-autonomous driving features as soon before they were available, and despite the delays, the features still delivered and are impressively useful and convenient. "A poor ramp and customer experience on Model 3 could not only impact Tesla's near-term financials, but undermine the franchise longer-term".
While raising cash isn't critical to releasing the Model 3, it would probably be wise, Musk said on the February 22 earnings call.
So, that means if you picked up a 60 or 60D you were probably struggling to get into the vehicle at all.
The Model S 60 mainly served as a basement-level trim for those too impatient to wait until the release of the more affordable Model 3. "We suggest two answers: staggering ignorance and hubris". If anything, the size of the capital raise is smaller than many analysts had expected.