Tesla has announced plans to introduce more affordable models by 2025, dispelling previous rumors about the cancellation of such projects.
During the company’s first quarter earnings call, Tesla CEO Elon Musk outlined the updated product roadmap which includes the potential launch of these lower-cost electric vehicles (EVs) as early as 2025. This development comes amid financial reports indicating a 9 percent drop in revenue and a 55 percent decrease in net income for Tesla in the first quarter of 2024, with a slowdown in EV demand impacting sales.
Musk clarified that the new affordable models could either be a completely new addition to Tesla’s lineup or simpler versions of existing vehicles like the Model 3 and Model Y. This approach would not require new factories or massive production lines but would utilize current ones more efficiently, potentially increasing Tesla’s production to over 3 million vehicles annually.
Musk emphasized the integration of next-generation platform aspects with the existing ones that underpin the Model 3 and Model Y, Tesla’s top-selling models.
Musk Disputes Market Shift Toward Hybrids
The CEO also addressed investor concerns about the market’s shift towards hybrid vehicles rather than fully electric ones, a strategy he disagrees with. Musk assured that Tesla remains committed to its fully electric vision and hinted at future discussions about this during a significant unveiling scheduled for August 8, where a new robotaxi vehicle will be introduced.
Despite the commitment to more affordable EVs, Tesla has not confirmed whether these will be entirely new models or if they will simply be cost-reduced versions of the Model 3 and Model Y. The current price for a Model 3 stands at $38,990, close to the once-promised $35,000 price point.
Musk also touched on a new “unboxed” manufacturing process that is expected to reduce costs further, enhancing the affordability of Tesla vehicles.
Musk’s Vision on Affordability and Value
During the earnings call, when probed about the cheaper EV models and his personal commitment to affordability, Musk was notably reticent, especially when compared to his enthusiastic remarks on topics like autonomy and self-driving capabilities.
However, he did affirm the relationship between price and sales, asserting, “If you have a great product at a great price, sales will be excellent,” and promised continued efforts to improve the value offered to Tesla customers.
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