In a surprising reversal, Tesla announced plans to produce more affordable electric vehicles (EVs) as soon as next year, contradicting earlier reports that CEO Elon Musk had scrapped the idea in favour of a robotaxi project. However, details remain murky.
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During the company’s Q1 earnings call, Musk addressed investor concerns about the delayed low-cost EV, acknowledging an “updated vehicle lineup” with a focus on faster production. These new models might arrive in late 2024 or early 2025.
The twist? These affordable EVs will be a hybrid of sorts, combining elements of Tesla’s next-generation platform with their existing Model 3 and Model Y architecture. This strategy leverages existing production lines, potentially boosting output to over 3 million vehicles annually.
Tesla’s Q1 report painted a less rosy picture, with revenue dropping 9% year-over-year and net income plummeting 55%. Analysts point to a cooling electric vehicle market, highlighting the need for a more affordable offering to revive growth.
While Musk downplayed the hybrid approach, emphasizing the “wrong strategy” of focusing on hybrid vehicles over fully electric ones, he also teased a robotaxi reveal on August 8th. This vagueness leaves unanswered questions about the form these affordable EVs will take. Will they be entirely new models, or stripped-down versions of existing Teslas?
Currently, the Model 3, Tesla’s most affordable option, sits at $38,990 – still shy of the elusive $35,000 price point once promised. Tesla assures further cost reductions through a simplified manufacturing process.
Intriguingly, when pressed about the fate of the rumoured Model 2 and his commitment to affordable EVs, Musk remained tight-lipped. Conversely, he readily expounded on self-driving technology and even extraterrestrial life.
Tesla’s message is mixed. While promising improved affordability, they offer little concrete information. One thing remains clear: for Tesla to regain its footing, a compelling and competitive electric vehicle at a more accessible price point is crucial.
