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Tesla Model S Now Boasts Up to 390 Miles of Range

By Daniel Sparks – Feb 15, 2020 at 3:33PM

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And Tesla's Model X saw a boost in range as well. Here's why investors should care.

All Model S and X vehicles delivered in recent months actually have more driving range on a single charge than Tesla (TSLA -1.10%) let on, CEO Elon Musk said on Twitter this weekend. Specifically, the Model S and X now boast driving ranges of 390 and 351 miles, respectively -- up from 373 and 328 miles before.

The range of Tesla's Model S and X, the company's two flagship models, has improved significantly in recent years. Indeed, it was less than four years ago when the range of the Model S finally crossed the 300-mile barrier. Additionally, when the Model S was first launched in 2012, the maximum driving range of the most expensive version of the vehicle was just 265 miles.

A woman taking a test drive in a Model S

Model S. Image source: Tesla.

Engineering progress and software updates

Tesla's website has already been updated to show 390 and 351 miles of range for the long-range plus versions of the Model S and X, respectively. But for S and X cars that were delivered "in recent months," the company will soon unlock the range with a free software update, Musk Tweeted on Friday. The boost in range, Musk explained, is due to "Many small hardware improvements throughout the car that have been introduced gradually over past several months."

Tesla has unlocked more range and performance for its vehicles before. Software updates have improved performance factors like acceleration and driving range, as well as introduced improvements to the touchscreen's user interface, sound system, and more.

Mitigating cannibalization

While the boosted range for Model S and X is likely a nice surprise for owners of the recently built vehicles or for customers who were ready to buy a new Model S or X, investors should be pleased with the upgrade as well. It will likely help Tesla's two flagship vehicles stand out from Tesla's lower-priced Model 3, which has cannibalized some sales of Model S and X.

Since Model S and X have a higher gross profit margin than Model 3, each additional sale of the pricier vehicles has a greater incremental impact on Tesla's profitability. With a greater gap between the Model 3 and its two flagship vehicles' range, this improved range could be the dealbreaker for some customers to choose the Model S or X instead of the Model 3.

Further, range improvements for the two vehicles help them stand out from Tesla's upcoming Model Y crossover, which the company recently said will actually achieve up to 315 miles of range on a single charge instead of the previously stated 280 miles.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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