Tesla’s Model S and Model X have maintained their status in the electric vehicle market through continuous updates, yet face significant sales declines, particularly in Europe. To combat this, Tesla plans major enhancements by year-end, focusing on technical upgrades while integrating features from its more successful models. Despite a drop in global deliveries, the company remains committed to these luxury vehicles, needing innovative strategies to compete against rising contenders in the luxury electric segment and address challenges stemming from CEO Elon Musk’s controversies.
The Evolution of Tesla’s Model S and Model X
Over the past decade, the Tesla Model S and Model X have become iconic in the electric vehicle market. While it may seem unlikely for a vehicle to sustain a decade-long lifespan, Tesla has managed to keep these models relevant through consistent updates, adapting to the challenges posed by growing competition.
However, to maintain their appeal, Tesla must push the envelope further, particularly as these luxury models are showing signs of declining sales. In Europe alone, 2024 saw only 1,752 Model S and 1,694 Model X units sold, which represents staggering decreases of 60% and 68%, respectively, for the SUV and sedan variants.
Anticipating Major Updates for Tesla’s Flagship Models
In response to this downturn, Tesla is preparing for significant updates to the Model S and Model X. During a recent episode of the podcast Ride The Lightning, Lars Moravy, Tesla’s vice president of engineering, hinted that these models would receive “a little love” by year-end, addressing their stagnation compared to the more popular Model 3 and Model Y.
Reports suggest that improvements are underway in the production line for the Model S, likely in preparation for a major update that will include technical enhancements such as chassis, suspension, and interior upgrades.
While Moravy did not disclose specific changes, he noted that this refresh might exceed expectations. He recalled the structural modifications introduced in 2021, which, despite being downplayed by many, included significant features like the new Yoke steering wheel, a suite of onboard video games, and the formidable 1,000 hp Plaid version. The upcoming update is expected to build upon these advancements and incorporate elements from the Model 3 and Model Y improvements.
Interestingly, Tesla’s strategy has been to enhance its more affordable models first before rolling out innovations to the high-end range. While this approach may have allowed the Model 3 and Model Y to thrive, it has also led to the Model S and Model X lagging behind. This decision appears to stem from a need to compete in the fiercely contested budget electric vehicle market, which does not affect the premium pricing of the Model S and X, both of which start at over 100,000 euros in France.
Despite the drop in sales numbers, Tesla remains committed to its luxury models. In 2024, the Model S, Model X, and Cybertruck accounted for less than 5% of Tesla’s global deliveries, totaling just 85,133 units. Moravy emphasized that Tesla is not looking to phase out these iconic vehicles, reflecting a deep-rooted connection to their legacy.
As Tesla aims to rekindle interest in the Model S and Model X, a mere facelift may not suffice. The brand faces escalating competition in the luxury electric vehicle sector, with companies like Audi and Porsche enhancing their software through partnerships, and BMW developing its Neue Klasse platform. Moreover, the electric vehicle landscape is becoming increasingly crowded, with brands like Lucid and Lotus vying for market share.
On top of this, Tesla’s reputation has been impacted by controversies surrounding CEO Elon Musk, whose political views and business strategies have polarized certain segments of its customer base. To reignite sales for the Model S and Model X, Tesla may need to implement bold and innovative strategies, akin to the impressive launch of the 1,000 hp Model S Plaid at a remarkable price point.