The Mercedes-Benz 230TE was a variant of the S123 Wagon that debuted for the 1981 model year, the 230 TE was fitted with Mercedes' M102.980 engine, which was a 2.3L inline four that generated 136hp and 151 lb ft of torque. Drive was sent from the engine to the rear wheels through a variety of manual or automatic transmission options. A total of 42,248 examples of the S123 Mercedes-Benz 230TE were built before the end of production in 1986. The model series would continue life in the next generation of Mercedes-Benz E as the S124 Mercedes-Benz 230TE.