Tesla Motors Inc (NASDAQ:TSLA) shares plunged 7.82% to $23691 after the company unveiled its ‘D’ variant of Model S sedan at a glitzy media event. Investors were expecting the company to announce something more exciting, maybe a driverless car. The D version will offer all-wheel drive and an advanced driver assistance system for semi-autonomous driving.

Tesla Motors Inc Model D To Boost Margins

AWD in Model S unlikely to be a game-changer

Barclays analyst Brian A. Johnson said the addition of all-wheel drive (AWD) to Model S is unlikely to be a game-changer. The timely product announcement ahead of the winter season in the U.S. may boost Tesla’s North America deliveries. AWD appeals to users in colder climates. But AWD won’t have a big impact in Europe where drivers are already used to adding snow tires to real-wheel drive (RWD) cars.

The D version of Model S is equipped with long-range radar, camera-based vision, and 360-ultrasonic sonar. The camera-based system will help in autonomous emergency braking, lane keep assist, lane departure warning, traffic sign recognition, and pedestrian detection. Tesla will start deliveries of 60D and 85D Model S in February 2015. Deliveries of the performance version (P85D) will begin in December 2014.

Deutsche Bank impressed by Tesla’s new features

Deutsche Bank analyst Rod Lache said in a research note that the market wasn’t surprised when Tesla unveiled these features. Rumors of such advanced technologies have been doing rounds for weeks. Lache, who attended Tesla’s event, said he was impressed by the functionality and performance of the features. The AWD version of Model S will cost $4,000 more than the standard Model S for 60kWh and 85kWh models. The price of all-wheel drive will acceleration boost (P85D) will rise from $105,570 to $120,170.

Lache said the D option will boost Tesla’s margins. Total hardware cost for AWD is expected to be less than $1,000, while Tesla has priced new versions at $4,000 more than the standard Model S. The hardware will be built into each vehicle. In fact, Tesla has already started adding the necessary hardware to new vehicles in production. And the features will be added via software updates. AWD will boost the acceleration to 60 mph in 3.2 seconds.

Deutsche Bank has a Buy rating on Tesla with $310 price target.