Tesla to speed up unveiling of new ‘affordable’ cars
Tesla has said it will introduce “new models” by early 2025 using its current platforms and production lines as it retreated from more ambitious plans to produce an all-new model that had been expected to cost US$25,000.
The talk of new offerings on a faster timeline sent Tesla shares soaring in after-hours trading, a much-needed boost after months of decline during which the firm has struggled with fierce competition and falling sales. The gains also came despite Tesla releasing first-quarter results that missed Wall Street expectations.
Chief executive Elon Musk declined to provide details of the new vehicles but said they would include more affordable models that would start production by early 2025.
That is just before the target Musk previously set for launching the all-new low-cost model widely known as the Model 2.
Reuters reported on April 5 Tesla had scrapped plans for the Model 2, which investors had expected to drive Tesla’s growth into a mass-market carmaker.
Musk initially reacted to that story with a post on his social platform X saying “Reuters is lying”, without pointing out any inaccuracies.
On Tuesday, neither Tesla nor Musk directly addressed the report. Instead, they discussed unidentified new models that appeared to be different products, without saying how many and what type or providing their target prices.
The new models would be built on Tesla’s current manufacturing lines and use “aspects” of its current platform and a nextgeneration platform, Tesla said. It cautioned this plan might “result in achieving less cost reduction than previously expected”, suggesting the vehicles might cost consumers more than the Model 2’s anticipated US$25,000 price.
The carmaker said its plan for new models would let it better control capital expenditures during “uncertain times”.
Tesla executive Lars Moravy said the company would avoid risk by halting plans for an all-new model, with a “revolutionary” production process.
Tesla’s work on the nextgeneration affordable car, he said, was “transferable” to the vehicles it now aimed to release early next year.
“That engineering work, we’re not trying to just throw it away,” Moravy said. “We’re going to take it and utilise it.”
Musk declined to answer an analyst’s question about whether the new vehicles would be all-new models or tweaks to existing vehicles. “I think we’ve said all we will on that front,” he said.
One observer took Tesla’s comments on the new models as a confirmation that it had halted plans for the Model 2.
“It seems clear that the new vehicle platform has indeed been shelved for now,” said Sam Abuelsamid, an analyst at Guidehouse Insights. “The nextgeneration vehicle was supposed to use fundamentally different production processes from current models. With no desire to spend billions on new production facilities or retool existing factories, it seems like we will see Tesla continue to build the current products.”
Currently, Tesla’s Model 3 and Model Y, with starting prices in the US$40,000 range, are its only volume sellers.
Tesla also mentioned a “purpose-built robotaxi product” that it planned to build with a “revolutionary” manufacturing process, without offering a timeline for its release. The April 5 story reported Tesla had planned to continue developing a self-driving robotaxi on the same platform it had been developing for the Model 2.
Musk devoted much of the call with analysts to outlining ambitious visions for diversifying Tesla’s business into artificial intelligence and humanoid robots and operating a fleet of millions of autonomous vehicles, all based on software and hardware products the firm had not yet fully developed. Tesla “should be thought of as an AI robotics company”, not a carmaker, Musk said.
More than 80 per cent of Tesla’s revenue in the first quarter came from selling electric cars.
The company has reported revenue of US$21.3 billion for the three months to March 31, compared with US$23.33 billion a year earlier. Analysts on average had estimated US$22.15 billion, according to London Stock Exchange Group data.
Net profit stood at US$1.13 billion, compared with US$2.51 billion a year earlier.