Why Tesla is downplaying the Model 3

Tesla is deliberately telling the public that one of its most anticipated vehicles isn’t actually that great, after all.

Why? Because people keep mistakenly thinking that the Model 3 will actually outperform Tesla’s older — but more luxurious — Model S, according to the company. In fact, the underlying technology will be much the same — and it’s the Model S that will continue to be the company’s top-of-the-line vehicle, with all the bells and whistles.

“I thought we were being clever by calling it the Model 3. But actually the joke’s on me, because there’s this confusion,” Tesla chief executive Elon Musk said in an earnings call Wednesday.

By calling it the Model 3, Musk said, some consumers have been accidentally misled into thinking that the number is a version number — similar to the way the iPhone 7 is considered “better” than the iPhone 6.

In explaining the difference between a versioning system and a model system, Musk himself got quickly sidetracked. “Model 3 is not version 3 of our car,” he said. “We’re probably on version 4 of Model S. And Model 3 will also be version 4 . . . It’s a little confusing. One is a letter, and the other is a number.”

It’s unclear just how many consumers may have been confused, or perhaps put down a $1,000 reservation deposit for a Model 3 they thought would be as sophisticated as the Model S. A Tesla representative didn’t immediately respond to a request for comment.

On Wednesday, Tesla released its first-quarter earnings report, showing greater-than-expected losses but somewhat higher revenue, at $3.7 billion for the quarter.