Chief Executive Officer Elon Musk said in a conference call with analysts that the company expects to begin production of the new model in early 2025, possibly by the end of this year. In January, he set a goal to release the next-generation low-cost EV, Model 2, in the second half of 2025.
Reuters reported earlier this month that Tesla had halted development of the Model 2, citing people familiar with the matter. The Model 2 would cost around $25,000 and was expected to be a driving force in Tesla’s growth into a mass-market carmaker.See more
At the time, Musk wrote on X that “Reuters is lying.”
The new model mentioned today appears to be a different product. Neither Tesla nor Mr. Musk directly addressed the Reuters report.
The new model will be built on current production lines and will incorporate elements from the current and next-generation platforms. “Cost reductions may not be as large as previously assumed,” Tesla said in a statement. He hinted that the expected price for the Model 2 could be higher than $25,000.
He also mentioned fully self-driving cars, “robotaxis,” but did not reveal when they would be released.
Reuters reported earlier this month that Tesla plans to continue developing robotaxis on the platform it was developing for the Model 2.
Musk declined to answer an analyst’s question about whether the new model would be a partial or complete refresh of current EVs.
Tesla’s engineering chief Lars Morabi said the company would avoid the risk of investing in a “revolutionary” manufacturing process. Mr. Musk has previously said the new, affordable cars will serve as a testbed for manufacturing innovations.
“It seems clear that the new platform has been shelved,” said Sam Abuelsamid, an analyst at Guidehouse Insights. He said the company will continue to produce its current products because it does not plan to spend large sums of money on new production facilities or upgrading existing factories.
Tesla said its plans for the new model will allow it to better manage capital spending during “a period of uncertainty.”
In the first quarter results (through March) announced on the same day, sales were $21.3 billion, down from $23.33 billion in the same period last year. The market forecast compiled by LSEG was $22.15 billion. The number of vehicles delivered decreased due to a slowdown in global demand and intensifying competition.
This is the first decline in sales since the second quarter of 2020, when production and deliveries were hampered by the coronavirus pandemic.
Reflecting the impact of repeated price cuts, average sales per unit fell nearly 5% from the same period last year to $44,926.
Net income was $1.13 billion. In the same period last year, it was $2.51 billion.
Despite the weak financial results, the affordable vehicle plan was welcomed by investors, but there was also skepticism.
“While it sounds promising, Tesla is a ‘show-me’ stock given the slow rollout so far,” said Jay Woods, chief global strategist at Freedom Capital Markets. It’s becoming a reality. It would be great if we could make it happen.”
<�“AI robotics company”>
Meanwhile, Musk has outlined a vision for Tesla to diversify into services using artificial intelligence (AI), humanoid robots, and self-driving cars. He stressed that Tesla “should be seen as an AI robotics company” rather than a car manufacturer.
He said his company’s self-driving cars will be “like a combination of Airbnb and Uber.” Some vehicles will be owned and operated by Tesla, while others will be owned by individuals but rented out through Tesla’s network.
Our Code of Conduct: Thomson Reuters “Principles of Trust” New Tab opens new tab
Akash reports on technology companies in the United States, electric vehicle companies, and the space industry. His reporting usually appears in the Autos & Transportation and Technology sections. He has a postgraduate degree in Conflict, Development, and Security from the University of Leeds. Akash’s interests include music, football (soccer), and Formula 1.
Tags: Teslas model released ahead schedule stock price soaring current vehicle chassis production line Reuters
-
