Tesla’s TSLA Model S, the vehicle that kickstarted the electric revolution, is set for a major update by the end of the year. This will be the third major refresh for the Model S and Model X that will align the models with the latest innovations introduced by the Cybertruck.
Tesla is not known for completely redesigning its cars. The Model 3 and Model Y have already undergone substantial updates. The Model 3 Highland stands out as a major departure from the original. In contrast, the Model S and Model X have seen only incremental design changes despite receiving technological upgrades over the years. However, Tesla now appears ready to bring these veteran models up to speed.
In a recent podcast interview, Lars Moravy, Tesla’s vice president of Engineering, confirmed that a refresh is planned for the Model S and Model X in late 2025. While Moravy did not provide specific details, he acknowledged that these foundational models deserve a significant overhaul.
The Model S was the car that cemented Tesla’s reputation as the first successful electric vehicle and a long-standing technological flagship until the Cybertruck took over that role. The Cybertruck’s introduction has also impacted sales of the Model S and Model X, which have gradually lost their appeal. The Model S first received an update in 2016, featuring minor exterior revisions but major technological improvements, including adaptive headlights, additional battery options (such as a 100-kWh pack) and enhanced motor configurations. A more substantial overhaul followed in 2021, shaping the Model S into its current form.
In 2023, the Model S and Model X were upgraded with the HW4/AI4 Autopilot system, enhancing their autonomous driving capabilities. Despite these updates, demand for $100,000 electric sedans has waned. Despite its signature falcon-wing doors, the Model X has faced stiff competition from newer family SUVs. The upcoming refresh is expected to introduce design elements from the Cybercab, as seen on the updated Model Y. While Tesla’s approach to exterior changes will likely remain subtle, significant improvements are anticipated beneath the surface.
One of the most notable upgrades is expected to be a switch to 4680 battery cells, replacing the older 18650 format. The Cybertruck’s production has ramped up 4680 cell availability. Tesla could use this surplus to make the Model S and Model X more cost-effective. Several Cybertruck innovations are also expected to make their way to these refreshed models, including a 48-volt electrical architecture.
Tesla halted right-hand drive production of the Model S and Model X in April 2023. Tesla Australia subsequently stopped taking orders. Some customers who placed orders before the halt are still waiting for their vehicles. With confirmation of an upcoming refresh, there is renewed hope that Tesla might reintroduce the Model S and Model X to right-hand drive markets.
Tesla carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited GELYY, Dana Incorporated DAN and Strattec Security Corporation STRT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELYY’s fiscal 2025 sales and earnings indicates year-over-year growth of 66.62% and 149.31%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 15 cents and 38 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for DAN’s 2025 earnings implies year-over-year growth of 59.57%. EPS estimates for 2025 and 2026 have improved 20 cents and 40 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for STRT’s 2025 sales indicates year-over-year growth of 2.61%. EPS estimates for 2025 and 2026 have improved 91 cents and $1.06, respectively, in the past 30 days.
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