Tesla said it will halt production of the midsize sedan "Model S" and the midsize sport utility vehicle (SUV) "Model X" in the second quarter, unsettling Korean consumers. The models can use supervised Full Self-Driving (FSD), which has surged in popularity in Korea recently. Some say simply being able to use FSD immediately makes them worth buying before they are discontinued, while others say buyers should be cautious because parts supply could become difficult in the future.
On the 9th, Tesla said production of the Model S and Model X is scheduled to stop in the second quarter of this year. Launched in 2012, the Model S introduced the idea of adding functions through software updates like a smartphone and was once called the "icon of innovation" in the auto industry. The Model X adopted the upward-folding "falcon wing" design in 2015, becoming a symbolic model that showed how flashy an electric vehicle can be. Elon Musk, Tesla chief executive officer (CEO), said, "It's sad, but it's time for (the Model S and Model X) to retire with honor," adding that the production sites will be converted into Optimus robot manufacturing hubs.
They once represented Tesla, but sales have slumped recently after many years on the market. According to market researcher SNE Research, Tesla sold a total of 1,636,000 vehicles worldwide last year. Given that the "Model Y" (1,065,000 units) and "Model 3" (520,000 units) accounted for 96.7% of total sales, it is clear the presence of the Model S and Model X has dwindled to barely noticeable levels. A person in the auto industry said, "Both the Model S and Model X are in the 100 million won range, and considering interior materials and finish quality, some say it's better to choose another premium brand at a similar price."
The fact that the Model S and Model X are produced only in the United States also became a risk. As U.S. President Donald Trump imposed high tariffs on countries around the world, some countries responded with retaliatory tariffs against the United States. China, Tesla's largest market, is a prime example. The phaseout of subsidies is shrinking the U.S. EV market, a situation that has highlighted corporate efficiency and, analysts say, hastened the discontinuation of unpopular models like the Model S and Model X.
News of the discontinuation has left Korean consumers confused. Even in Korea, the Model S and Model X did not sell in large numbers compared with the Model 3 and Model Y. But after Tesla began offering supervised FSD service in Korea in November, consumers' views of these vehicles changed. Among Tesla vehicles released in Korea, only three can use supervised FSD: the Model S, Model X, and Cybertruck. Because the futuristic pickup Cybertruck is burdensome to use for daily life, consumers who want FSD have effectively narrowed their choices to the Model S and Model X.
As a result, sales of the Model S and Model X have surged since late last year. According to market research firm Kaizuyu Data Research Institute, not a single Model S was sold from July to October last year, but sales jumped from two in November to 38 in December and 140 in January this year. For the Model X as well, only one unit was sold in October in the second half of last year, but sales began with six in November and rose to 138 in December. In January this year, sales soared to 211.
Consumer reactions fall into two main groups. First are those who want to move up their purchases of the Model S and Model X before they are discontinued. They argue that for at least several years, the only vehicles that can use FSD in Korea will be the Model S and Model X. A consumer who said a Model X was reserved noted, "The Model 3 and Model Y are made in China, so to use FSD with those vehicles, regulations need to be eased," adding, "Even if regulations are eased, FSD features could be more limited than on the U.S.-made Model S and Model X."
Tesla's plan to soon switch FSD from a lump-sum purchase to a subscription is also boosting sales of the Model S and Model X. Now, if you pay about 9 million won for the FSD option when buying a car, FSD is tied to the vehicle and remains available permanently for that vehicle even if the owner changes. But if, as Musk said, the system switches to a monthly subscription starting on the 14th, the ability to use FSD will depend on whether the owner subscribes. Depending on how long someone uses a Tesla or if subscription fees rise, the owner's burden could grow compared with the lump-sum option.
On the other hand, some say they will cancel their Model S and Model X reservations. One consumer said, "They'll be fine for the next two to three years, but I'm worried that over time updates will stop and parts will become hard to get." Because the Model S and Model X are premium lines, they are known to use many exclusive parts. The Model X's falcon wing components are a prime example. This door design is unique to the Model X within Tesla.
The discontinuation of the Model S and Model X is also prompting concern among consumers that Tesla's mass-market image will grow stronger. Last month, Tesla cut domestic prices for the Model 3 Standard RWD and Premium Long Range RWD to 41.99 million won and 52.99 million won, respectively. With national subsidies and local subsidies combined, the Standard RWD can be purchased in the 30 million won range. The Model Y also fell by about 3 million won last year, making it available in the low 50 million won range.
An auto industry source said, "Tesla has an image as a premium brand among EVs, but if prices for popular models fall and the high-end models disappear, it could gain an image as a 'mass-market car.'"