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Remembering Tesla’s Original Budget Car – the Model S 40 kWh

As the world continues to wait for Tesla to produce an affordable Model 3, it’s worth remembering that value was part of Tesla’s pitch a decade ago.

When the company debuted the highly-anticipated Model S in 2009, they issued a press release touting a $49,900 electric car. Chief Executive Elon Musk offered a quote later in the release to drive home the great deal.

“Model S costs half as much as a Roadster, and it’s a better value than much cheaper cars,” Musk said. “The ownership cost of Model S, if you were to lease and then account for the much lower cost of electricity vs. gasoline at a likely future cost of $4 per gallon, is similar to a gasoline car with a sticker price of about $35,000. I’m positive this car will be the preferred choice of savvy consumers.”

The Model S that packed all the “value” didn’t actually hit the configurator until three years later. For that $49,000 price tag, Tesla offered a Model S with a 40 kWh battery pack and a range of 139 miles. And like any other entry-level version of a vehicle, the 40 kWh Model S was missing several features. Buyers got the 19-inch wheels and 17-inch touchscreen found on the $80,000 Model S 85 kWh Performance version, but had to pay up for options like built-in navigation and a back-up camera. But, most notably, the 40 kWh cars did not have Supercharging.

The 40 kWh Model S went on sale in 2012. By April 2013 it was removed from Tesla’s offerings, which was announced in another press release:

Also being announced today is that the small battery option for the Model S will not enter production, due to lack of demand. Only four percent of customers chose the 40 kWh battery pack, which is not enough to justify production of that version. Customers are voting with their wallet that they want a car that gives them the freedom to travel long distances when needed.

It’s estimated that about 400 Tesla Model S 40 kWh cars were delivered, but the truth is, Tesla never actually built the 40 kWh Model S. Instead, they filled the orders using 60 kWh packs to save the development costs and used software to limit the pack to 40 kWh. The cars benefited from improved acceleration, a higher top speed, and the option to unlock the full 60 kWh for $10,000.

So, you could say that Tesla’s first attempt to sell an affordable electric car flopped. An overwhelming majority of customers were willing to pay up for more than the base model offered.

It will be interesting to see if the base version Model 3 with its 50 kWh battery pack and 220 miles of range receives similar reaction. A survey from Model3Tracker.info found that 87% of the U.S. reservation holders participating in the survey said that they want to add at least one option – meaning that only 13% plan to buy the basic Model 3 at $35,000.

The Model 3 Long Range has already proved it can top sales in the midsize luxury sedan market, and has attracted the most trade-ins from owners of cars like the Toyota Prius, BMW 3 Series, Honda Accord, Honda Civic, and the Nissan Leaf. The fact that cars from a more affordable segment are being swapped for a Model 3 that starts at $49,000 (interestingly the same price as the Model S 40 kWh) bodes well for both the budget and more expensive versions of the vehicle. The Standard Range RWD version of the Model 3 is expected to start production early next year.

Or, you can skip the Model 3 and buy the OG Tesla budget ride – the Model S 40 kWh. Low-mileage versions sell today for around $40,000, near the original sticker price. Spend nearly double that amount and you can get a new Model S with a 75 kWh battery, which starts at about $75,000.

It’s not going to be be your best option for a road trip, with owners reporting the aging battery packs dipping range below 130 miles, but it may be an opportunity to own a rare classic.

You could make a case for the 40 kWh Model S becoming collectible, given its low production run. Those that have not unlocked the 60 kWh battery could be among the rarest Teslas.

TMC has several owners of the 40 kWh cars that jump in the forums from time to time. And, there’s the occasional request on TMC from someone trying to track down a 40 kWh car for purchase. Owners seemed to be mixed on whether it’s worth it to unlock the 60 kWh battery, though some owners claim they have negotiated a lesser fee from Tesla for the upgrade.

So will the base Model 3 go the way of the Model S 40 kWh? Will it be the “value” that nobody wanted? Or will “savvy consumers” feel they finally have the “freedom to travel long distances when needed.”

And, is it possible that someday a Model S 40 kWh could best a Model 3 at auction?

GSP

Member
Dec 28, 2007
2,565
796
"swapped for a Model 3 that starts at $49,000 (interestingly the same price as the Model S 40 kWh)"

This is not correct. The 40 kWh Model S sold for about $57,400. The below $50k price was after the US federal income tax credit.

$49k for today's LR 3 is the price before the tax credit.

GSP
 

2xM3

Member
Jul 20, 2018
24
40
Los Angeles
Collectible because it was decontented and there weren’t that many. The other S’s in the same year aren’t collectibles. No. I don’t see any historical case in car history where a decontented model became a collectible.

“Hey look what I got in my garage. An old Tesla S with the smallest battery available!”
 
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Reactions: MarkKW

FlatSix911

Porsche 918 Hybrid
Jun 15, 2015
6,504
5,915
Silicon Valley
Collectible because it was decontented and there weren’t that many. The other S’s in the same year aren’t collectibles. No. I don’t see any historical case in car history where a decontented model became a collectible.

“Hey look what I got in my garage. An old Tesla S with the smallest battery available!”

The orginal Model S 40 kWh came with a locked 60 kWh battery.
Tesla unlocks the 60 kWh capacity when a Model S 40 kWh is traded in resulting in even fewer 40 kWh models in the wild :cool:

upload_2018-9-1_12-13-25.png
 

SageBrush

REJECT Fascism
May 7, 2015
12,176
15,092
New Mexico
$49k for today's LR 3 is the price before the tax credit.
Right.

We should also remember that the Model 3 LR/PUP (at about $43k after the $7500 federal tax credit) is in 2018 money, has over double the range, is much quicker, and enjoys a massive Supercharger network at low cost. The value proposition for a Tesla car has improved dramatically.
 

Charlie_T

Member
Aug 4, 2018
27
11
Bainbridge Island, WA
Collectible because it was decontented and there weren’t that many. The other S’s in the same year aren’t collectibles. No. I don’t see any historical case in car history where a decontented model became a collectible.

“Hey look what I got in my garage. An old Tesla S with the smallest battery available!”
What about the Delorean, the Tucker or the VW Beatle (original)?
 

Exiom

Member
Nov 29, 2017
206
105
Hong Kong
Is that a concept / aftermarket nose cone and badge on the picture or did MS40 actually came looking like that?

I want that nose cone...
 

MXWing

Well-Known Member
Oct 13, 2016
7,294
17,888
USA
Don’t forget inflation and buying power making the Model 3 LR even more stupid cheap compared to the S40.
 

Familyfirstj

President/Co-Founder TOC San Joaquin Valley
Aug 1, 2018
86
62
Stockton
"swapped for a Model 3 that starts at $49,000 (interestingly the same price as the Model S 40 kWh)"

This is not correct. The 40 kWh Model S sold for about $57,400. The below $50k price was after the US federal income tax credit.

$49k for today's LR 3 is the price before the tax credit.

GSP
The 40kwh model S is going for under 35k online i keep seeing them
 

ItsNotAboutTheMoney

Well-Known Member
Jul 12, 2012
10,312
7,396
Maine
Right.

We should also remember that the Model 3 LR/PUP (at about $43k after the $7500 federal tax credit) is in 2018 money, has over double the range, is much quicker, and enjoys a massive Supercharger network at low cost. The value proposition for a Tesla car has improved dramatically.

Sometimes people point to the cancellation of the S40 and suggest Tesla will do the same with the SR. But it is night and day in terms of the value proposition of the base car and the potential market.