It's the latest in a string of recently announced Model S variants that might help the company sustain consumer excitement until it can produce a truly all-new model. Like Tesla's bigger, more powerful 85D and P85D, the 70D is an all-wheel-drive version with dual electric motors, one on each axle.
Tesla, which two years ago had the luxury electric car market virtually to itself, now faces increasing competition from other companies. German automakers Mercedes-Benz, Audi and BMW have begun offering high-performance, plug-in electric cars. GM has said its 2017 Chevy Bolt will be capable of running 200 miles between charges, and may cost as little as $30,000 after rebates.
Analysts reacted to the 70D announcement with guarded optimism.
"Tesla Motors is fine-tuning its offering by significantly revising its base Model S, giving it added range and standard all-wheel drive [which] makes the base model more appealing and should drive up its popularity," said Kelley Blue Book market analyst Jack Nerad. "But we expect that most Tesla buyers will continue to step up to the top-level versions of the car, which offer more range."
The lower price of the 70D comes with less performance. The P85D, which starts at $105,000 and can cost much more with options, comes with an "insane" driving mode and accelerates from zero to 60 mph in just over 3 seconds.
The 70D is merely quick, with a zero-to-60 mph time of 5.2 seconds, but targets consumers looking to get into a Tesla as inexpensively as possible. Still, its dual-motor system is capable of driving the 70D to a top speed of 140 mph, Tesla says.
The 70D has a driving range of about 240 miles, similar to other Model S sedans but not quite as high as the range claimed by the P85. Owners will have free access to the company's national Supercharger network of charging stations.
Tesla shares, which were trading at $190 only a month ago, have risen in recent weeks and were up 2% to $207, on the news. The stock is still trading well below its high of $286 18 months ago.
The new S will come bundled with Tesla's Autopilot hardware, which enables the car to automatically speed up and slow down with moving traffic, as well as a navigation system, blind spot detection and other features.
The sticker price will be $75,000, before a $7,500 federal government rebate to buyers of electric cars. Incentives from California and some other states bring the price down a bit further.
The new vehicle will be available in colors new to the Palo Alto-based company: ocean blue, obsidian black and warm silver. Those new colors will also be available on the 85, 85D and P85D models.
The all-wheel-drive 70D is seen as a replacement of sorts for the company's other entry-level electric vehicle, the rear-wheel-drive Model 60, which the company said it would now discontinue. (Tesla will still offer a RWD Model S 85.)
But the 70D is not the more "affordable" Tesla the company has been promising. Tesla says its Model 3 will cost about $35,000, but it may be several years before it goes on sale.
The company has promised to deliver its all-wheel-drive crossover SUV, the much-anticipated Model X, in the third quarter of this year. According to its website, a new 70D, ordered now, will be delivered in May.