One of the biggest challenges for Tesla has been the higher upfront cost of its electric vehicles compared to traditional gas-powered models. The cheapest Tesla they currently sell is priced at $42,490 before subsidies in the US, while the average starting price for its 2024 models sits just above $63,000.
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However, in its third-quarter disclosure, Tesla announced that it’s preparing to offer more affordable vehicles. The company also noted that the cost of goods sold per vehicle has dropped to its “lowest level ever,” now at $35,100.
“Plans for new vehicles, including more affordable models, remain on track for production to start in the first half of 2025,” Tesla’s report stated. These new models will incorporate elements from both Tesla’s next-generation platform and existing platforms, allowing them to be built on the same production lines as the current vehicle lineup.
Tesla aims to “begin launching” its more affordable EVs by mid-2025. However, the language is somewhat vague, meaning there’s no firm assurance that these models will be available within that year.
Tesla’s financial performance in the third quarter also surprised many. Despite issues like the Cybertruck’s fifth recall and a federal investigation into its Full Self-Driving feature, the company reported an 8% increase in net income, reaching $2.51 billion, while sales rose 2% year-over-year. This also marks the end of Tesla’s four-quarter streak of missed earnings targets.
