The new version, called the Model S 60, starts at $66,000. An all-wheel drive version of the Model S 60 will start at $71,000. Both cost less that the current Model S 90D, which starts at $89,500.
Tesla said that when tax incentives and gas-savings are taken into account, the Model S 60 will have an effective cost of about $50,000.
The company says the Model S 60 can travel 200 miles per charge and has a top speed of 130 miles per hour.
Palo Alto, California-based Tesla Motors Inc. is taking orders for the new Model S 60 for delivery next month, according to its website.