• by Tanya Gazdik , August 24, 2016

Tesla’s shares ticked upward Tuesday morning after CEO Elon Musk tweeted that the company was set to make a "product announcement" later in the day. As promised, at 3 p.m. Eastern, Tesla announced new versions of its Model S sedan and Model X crossover, with substantially faster acceleration and longer battery range. 

The 100 kWh battery increases range substantially to an estimated 315 miles, making it the first to go beyond 300 miles and the longest range production electric vehicle by far. The larger battery pack is also available on the Model X. Model X P100D with Ludicrous mode accelerates to 60 mph in 2.9 seconds and travels up to 289 miles on a single charge.

Range anxiety has long been one of the biggest obstacles for the adoption of electric cars, says Jessica Caldwell, Edmunds.com executive director of industry analysis.

“By developing vehicles with longer-range batteries, Tesla is moving the ball forward not just for itself, but the entire EV industry,” she says. “For now, only folks who can afford a six-figure vehicle will be able to enjoy the luxury of faster speeds and longer range, but this is the sort of innovation that will improve the electric car's reputation with skeptical shoppers. Now the challenge is to make this sort of technology available at lower price points.”

Tesla claims that the Model S P100D with Ludicrous mode is the third-fastest accelerating production car ever produced, with a 0-60 mph time of 2.5 seconds, following the LaFerrari and the Porsche 918 Spyder.

The announcements follow a spat of negative news pertaining to the company, including several fatalities in vehicles being driven on autopilot. 

“Tesla needs to maximize any positive product news, and while performance ranks midway on the list of purchase reasons for most luxury car buyers, Ludicrous mode is a popular option for many Tesla buyers so this may be very relevant for them,” says Rebecca Lindland, senior analyst for Kelley Blue Book.

Another Kelley Blue Book analyst was less than impressed. Michael Harley, analyst for Kelley Blue Book, calls the announcement “nothing more than headline-grabbing showmanship.” 

“Tesla’s Model S and Model X are not performance vehicles, despite Elon’s continuous attempts to market them as such,” Harley says. “True sports cars are not only capable in the sprint, but are adept in handling and braking as well - his sedan and crossover lack both of those skills.  With limited top speeds, and the inability to circle a complete racing circuit without overheating, they are nothing more than a pair of one-trick ponies. Tesla needs to focus on building a quality product, taking care of its customers, and profitability - not accelerating away from its issues at breakneck velocities.”

The automaker announced that customers who have ordered a P90D Ludicrous, but not taken delivery, can upgrade to the 100 kWh pack for $10,000. Existing P90D Ludicrous owners can also upgrade to a 100 kWh pack, but for $20,000, as their used 90 kWh pack will have to be recycled.

“While the P100D Ludicrous is obviously an expensive vehicle, we want to emphasize that every sale helps pay for the smaller and much more affordable Tesla Model 3 that is in development,” the automaker said in a  release.  Without customers willing to buy the expensive Model S and X, we would be unable to fund the smaller, more affordable Model 3 development.”