Canadian Markets close in 4 hrs 55 mins

Tesla will discontinue cheapest Model S on Sunday

Angelica LaVito
Tesla will discontinue its cheapest Model S, the rear-wheel drive 75, on Sunday.

Tesla will discontinue its cheapest Model S, the rear-wheel-drive 75, on Sunday.

Business Insider first reported the news, which Tesla later confirmed to CNBC.

Tesla first announced in July that it would discontinue the rear-wheel model. The company is shifting to an all-wheel-drive lineup for the Model S to simplify its product offering.

The Model S rear-wheel version started at just over $70,000. Prior to the release of the Model 3, this would have been considered Tesla's entry-level sedan.

Meanwhile, the initial batches of the Model 3 will boast rear-wheel drive. CEO Elon Musk has said he expects to offer an all-wheel-drive version in the future.

Musk had said there was some customer confusion that the Model 3 was an improvement over the Model S, when in fact the Model 3 is simply a less expensive and entirely different car altogether.

Tesla has discontinued other battery options for its cars before.

— CNBC's Robert Ferris contributed to this report.