People do cross-shop new models (and loaded lower vs. less-loaded higher) out of class all the time, so I don't agree it is that simple. I have a lot of experience especially in the Audi communities. They launch new classes of cars so often that they necessarily bleed buyers from other classes... Audi A7 buyers definitely came from both A6 and A8, even A5... And even outside that, a new A4 will get some buyers from an older A6, definitely, some people want new cars often and won't buy the same model version twice...
However, I do agree it gets unusually exaggerated in the case of Model S because it has been gathering so much buyers out of class due to being the only large-battery BEV basically (with Model X). Also, its effects on Tesla are exaggerated because of the smallness of their line-up.
But there is tons Tesla could do - demand-lever-wise - if they just stopped the reverse discounting and anti-selling and did some honest to goodness price campaigning and advertising... I mean, Q3 got results when they discounted... wonder how much they could achieve by lumping a few features together for a pack and putting a discount on the whole thing and a YouTube ad...
Selling the positives of a product is much nicer than selling on the negatives of its sibling...
