The rear-wheel-drive Model S 75 starts at $69,500. Getting rid of that leaves the all-wheel-drive 75D as the cheapest Model S, at $74,500. This increases the price gap between the Model 3 (starting at $35,000) and the Model S. This would also leave the S as an AWD-only lineup, leaving the 3 as the only new Tesla available with RWD.
Further distinguishing the two models is the fact that the Model S is much more customizable. Earlier, we saw a Tesla document that compares the two vehicles, showing that the Model S offers more than 1,500 configurations and a number of premium features, while the Model 3 offers fewer than 100 possible configurations. The sheet also points out that although Model S customers who buy their car with a referral get free Supercharging for the life of the ownership, Model 3 customers are relegated to pay-per-use charging on Tesla's network.
With a big difference in performance and features, and now the wider price gap between the two sedans, Tesla is keeping the pools of prospective buyers as far from each other as possible.