Elon Musk says Tesla Model S Plaid sounds better than Sony PS5

Elon Musk compared the Tesla Model S Plaid’s entertainment system to the performance of a Sony PS5 and said its 22-speaker sound system offers a home theater-like experience.

Tesla CEO Elon Musk  (AP)

Elon Musk billed Tesla Inc.'s newest vehicle, the Model S Plaid, as a halo product that proves the superiority of electric cars at an event marking the start of deliveries to customers.

“Why make this really fast car that's crazy fast?” the chief executive officer asked rhetorically outside Tesla's factory in Fremont, California. “There is something that's quite important to the future of sustainable energy, which is that we've got to show that an electric car is the best car, hands down.”

The new flagship will likely provide an incremental boost to Tesla's deliveries, but the high-end S and X models remain a niche business compared to its mass market 3 and Y cars, Dan Levy, an analyst at Credit Suisse with a neutral rating on the stock, said in a research note Friday.

“While the start of Plaid deliveries provides some excitement on the product front, we believe Plaid remains secondary to Tesla's aspirations in Model 3/Y.”

Tesla shares fell 1% to $604.09 as of 9:50 a.m. in New York. They dropped 14% through Thursday's close, well behind the 13% gain for the S&P 500 Index.

Disappointing Start

The eightfold gain in Tesla's stock price last year made the company the world's most valuable automaker and helped boost investor interest in the broader electric-vehicle space. But the EV market leader has gotten off to a disappointing start to this year.

At the Plaid debut late Thursday, Musk attempted to showcase Tesla's engineering prowess at a time his company's lineup is facing competition from battery-powered vehicles including Ford Motor Co.'s Mustang Mach-E and the Porsche Taycan.

He touted the sleek sedan as being able to go from zero to 60 miles per hour in less than 2 seconds, though that time excludes an initial roll forward, according to the company's website. The car offers an estimated 390 miles of range, reaches a top speed of 200 mph and costs $129,990 in the U.S.

“This is what I call limit-of-physics engineering,” said Musk, wearing a black leather jacket with a plaid logo on the back.

The Model S was Tesla's breakthrough sedan, with initial deliveries starting in 2012. While the older Model S and X are dwarfed by the newer and cheaper 3 and Y, the higher prices they command make important contributions to the company's profitability. The first 25 Plaid cars were handed over to customers Thursday, and Musk said he expected the company to deliver 1,000 a week by next quarter.

During a less than 30-minute presentation, Musk rattled off improvements including a new battery pack, carbon-wrapped rotors and tri-motor powertrain. The name Plaid is a reference to a high-speed space travel scene from the 1987 comedy movie “Spaceballs.”

Changes to the exterior design made the car more aerodynamic. Inside, the front seats are moved forward to increase room for passengers in the rear, which now features a second touch screen.

Home Theater-Like

Musk compared the car's entertainment system to the performance of a Sony PlayStation 5 and said its 22-speaker sound system offers a home theater-like experience.

“If you think about where the future of the car is, often in Autopilot or self-driving mode, then entertainment is going to become increasingly important,” he said. “You're going to want to watch movies, play games, use the internet.”

The event lacked a “one more thing” surprise about other vehicles in Tesla's product pipeline, such as the Semi or Cybertruck. Musk also didn't provide any update about new battery cells the company is developing in-house or discuss the decision to kill a longer-range Plaid+ version of the Model S.

Tesla typically hosts one or two splashy events per year to keep customers excited and plunking down deposits on products. They also serve an important promotional purpose, since the company avoids spending on traditional advertising.