You may have heard about Tesla's "insane mode," which accelerates a sedan from 0 to 60 mph in a mindboggling 3.2 seconds. But Tesla is already moving ahead with something even better: A "ludicrous mode" that sends you from 0 to 60 in 2.8 seconds.

Shaving off half a second may not sound like much. But the $10,000 option on the Model S shows off some of the advances in battery technology that Tesla is building into its newer cars. Under ludicrous speed, said Musk, the car will accelerate at 1.1 times the force of gravity.

"It's faster than falling," said Musk.

The Model S is also getting a battery capacity upgrade from 85 kilowatt-hours to 90 kWh, an increase of around 6 percent that will cost existing owners about $3,000 if they choose to upgrade. Not everyone should be upgrading every year, though, as Tesla expects to add around 5 percent capacity to its batteries every year on average. That translates to a roughly 5 percent annual increase in range. Musk said he expects most customers to upgrade batteries once every three to four years.

Musk also teased ludicrous mode for the much-anticipated Model X, which will accelerate the heavier crossover vehicle from 0 to 60 in around 3.3 seconds.