The recent announcement hints that Tesla is going to go on the affordable route again. Yes, yet again. Tesla’s move to make electric cars more affordable has stirred up excitement among investors.
The news is making a huge buzz with its stock price surging by 12% following the announcement. The EV maker is said to speed up the production of lower-priced EVs, with plans to start manufacturing the first cars as early as this year.
But what exactly does Tesla have in store, and how soon will these new models hit the market?
Tesla Affordable EV Announcement on Q1 2024 Earnings Call
During Tesla’s Q1 2024 Earnings Call, Tesla shared plans to speed up making more affordable cars. The production is possibly starting as early as late this year or beginning of the next year in 2025. This might include Model Y refresh, called Juniper, and a new $25k low-cost car, Redwood.
Despite recent reports suggesting otherwise, Tesla has clarified that it’s still committed to building cheaper EVs, possibly as early as 2025. This refutes rumors that CEO Elon Musk had scrapped plans for a budget-friendly “Model 2” to prioritize the development of a Robotaxi.
We covered the update to make a $35k EV in our article earlier as well. These EVs reportedly would use a mix of new and current Tesla tech and will be made alongside the current lineup.
Notably, the Robotaxi, dubbed “CyberCab,” remains on track to spearhead Tesla’s “unboxed” manufacturing strategy. This might be Tesla’s strategic stance to keep the competitive and innovative tech thriving.
How Affordable Will The Upcoming Cheaper Tesla Be?
Tesla hasn’t finalized the price for its new “more affordable” models yet. They originally aimed for the Model 2 to cost $25,000, but now they’re not sure if they can reach that target.
Chinese EV makers are definitely giving a hard time to Tesla with a bunch of already available affordable models. Even so, considering the cheapest Model 3 starts at about $39,000, there’s still hope that Tesla’s efforts will make electric cars more affordable for more people.
Tesla and Its Competition
Critics like James Womack argue that Tesla should adopt a more traditional approach to vehicle launches to mitigate execution risks. Former Ford employee K. Venkatesh Prasad suggests that Tesla’s strategy shift could help it better compete with Chinese automakers and meet the demand for cheaper models.
However, Musk didn’t specify whether these lower-cost EVs would be entirely new models or simplified versions of existing ones. Nonetheless, it’s encouraging to see Tesla may still have some winning cards up their sleeves with this one given the continued competition from other global EV makers like BYD.
Ultimately, Tesla’s ability to balance Musk’s visionary goals with the realities of execution will determine its success in navigating the evolving EV landscape.
How Tesla Plans To Make It?
Okay, Tesla is going to make cheaper vehicles, but how exactly they’re going to do it? Elon has already stressed how difficult it is quite a few times. Tesla didn’t share many details about how these cars will look or what they’ll do.
Before, Tesla talked about making a Model 2 that would cost $25,000 or less, but now it seems like those plans might have changed. Musk didn’t say for sure if these new cars will be totally new or just tweaks of the ones they already make.
To speed up making these affordable cars, Tesla might be stepping back from the Model 2 idea. They wanted to use a new way of making cars called “Unboxed” manufacturing, where different parts are built at the same time and put together later. This was supposed to cut costs in half, but getting factories ready for this would need a lot of money, maybe several billions.
So, there is still not much information out there on how actually Tesla will make it possible but it is going to be exciting to see Tesla pull this off successfully.
Bottomline
They’re talking about it again, but they haven’t confirmed if they’ll make entirely new affordable models. It’s possible they might just tweak the existing Model 3 and Model Y to make them cheaper.
Right now, you can buy a Model 3 for $38,990, which is almost as low as it’s ever been, but still not as cheap as the $35,000 they promised years ago. Tesla thinks they can make cars even cheaper with simpler “unboxed” manufacturing.
When someone asked Elon Musk about these cheaper cars, he didn’t have much to say. Instead, he talked more about self-driving cars and even aliens! So, it looks like we’ll have to wait a bit longer for more concrete details on Tesla’s affordable cars.
