Comment by trhway 3 days ago
The refresh would need large investment. And it seems that S/X weren't selling that well to warrant such an investment. Just looking around - SV, a key market for Tesla - everybody buys 3 and Y, not S and X. In some sense it seems that 3/Y cannibalized S/X.
How can legacy auto refresh models every two years and Tesla cannot?
Pretty sure the Mercedes S-Class is also not selling a ton of units.
268K of 5 top end Mercedes models were sold in 2025 (and like 1/3 of them were sold in Maybach or AMG version!). Where is Tesla S and X combined sales were only 32K in 2024 and 18K in 2025.
You wouldn't mistake Mercedes S-Class for E-class and E-class for C-class. Even BMW 7 vs. 5 vs. 3 look more distinct than Tesla S vs. 3 and X vs. Y. The Mercedes and BMW do the good job of market differentiation while in my view Tesla failed here, and thus cheaper 3 and Y cannibalized sales of S and X. Thus, paradoxically, given that Tesla started in luxury segment, Tesla hasn't recently been capturing that high margin of the luxury segment (which is doing very well overall - just look at those Maybach and AMG numbers)
The problem is just there is no concept of a car company where they only sell their standard mass market vehicles. Somewhat more expensive higher margin vehicles are in the lineup for almost all the other companies. Its kind of strange to suggest its not worth it when it is seemingly worth it for most other companies.
Maybe the wisdom of having a 'full lineup' is wrong and has to do with making dealers happy.
On the other hand, having 99% of your sales be 2 very similar vehicles seems questionable strategy.
It is worth it when it is done right, i.e when you do correct market differentiation (see my other comment here on Mercedes) to avoid your low end cannibalizing your higher end. This high margin really helps you, and this is why almost everybody does it. EVs are probably even better suited for it given that the platform itself is easier/cheaper to share between the low end and the high end - thus the current Teslas S/X story looks even more of a failure as by releasing 3/Y that similar to S/X (that probably helped a lot with 3/Y sales though) they forced themselves into the need for a very significant (expensive) redesign of S/X while having very low sales of it.
The big issue with S/X was that they were not luxury enough, in terms of performance they were fine. So the redesign was mostly needed in terms of interior quality, materials and so on. Not that crazy expensive and something all other car companies manage to do.
I see it differently - they needed to redesign everything except the power train. I.e. in addition to the interior, externally it should have been looking way upscale from 3/Y. Giving that their design language is already almost 2 decades old, they needed (and actually would still need it for 3/Y max 5 years down the road) to have a full redesign for S/X similar to how BMW did with 2002 7-series trickling down that design into 2004 5-series and 2006 3-series (or like Mercedes did with S-class in 1996 and trickling down that to E and C later)
I don't know if it's genius or madness, but all of Tesla's cars look the same. When I see a Tesla, I can't tell if it's a 3, S, X, or Y unless I get close. The most distinct one is the X with its fancy doors.
So when I hear they're cancelling the S and X I can't even picture which cars we're talking about.