Tesla Affordable Cars
As early as late this year, Tesla plans to use its current manufacturing to produce new, more reasonably priced cars.
As early as late this year, Tesla plans to begin producing new, more reasonably priced vehicles at its current factories, the company said on Tuesday. According to Reuters, this move will delay investments in new factories in Mexico and India. The top producer of electric cars (EVs) in the world plans to add new production lines after increasing output by 50% starting in 2023 and attaining its present capacity of about 3 million vehicles.
“This update may lead to less cost reduction than previously anticipated but allows us to prudently grow our vehicle volumes in a more cost-effective manner during uncertain times,” the company said.
Tesla stock
Investor reaction was encouraging despite the company’s first-quarter performance falling short of Wall Street projections due to the decision not to develop new models at new plants. After-hours trading saw a 12% increase in Tesla shares despite the company missing its financial projections.
Elon Musk, the CEO of Tesla, made a hint about the release of more reasonably priced models, which are expected to be on sale in early 2025. This is consistent with Musk’s previous plan to introduce the highly anticipated Model 2, a low-cost vehicle.
Musk’s strategy was applauded by Elliot Johnson, chief investment officer of Evolve ETFs, which oversees over $6 billion in assets, including holdings in Tesla and other EV manufacturers. “It’s a positive sign that he’s not just rushing ahead with expansion plans, ignoring market challenges, and instead focusing on building a cheaper vehicle from the existing product line,” Johnson stated.
Tesla had canceled plans to introduce the affordable Model 2, which was to be manufactured in Texas, Mexico, and another place, earlier this month. It was anticipated that the Model 2 would help Tesla break into the mass market and cost about $25,000.
In response to a tweet posted on X (previously Twitter) in response to news that Tesla had canceled the Model 2, Musk stated that “Reuters is lying.” He refrained from offering any additional information, and he avoided explicitly addressing the report on Tuesday.
Instead, Tesla talked about brand-new models that didn’t seem to be related to previously disclosed initiatives. Musk had said in January that the new, less expensive model will be released by Tesla in the second half of 2025 and that it would use “revolutionary manufacturing technology” to power the company’s next phase of expansion.
On Tuesday, Tesla’s chief technical officer, Lars Moravy, admitted that new production lines and manufacturing techniques come with “some risks.” Consequently, the carmaker changed its strategy to make use of already-existing facilities in order to swiftly and effectively create affordable cars.
Musk’s India visit
Musk was supposed to meet with Prime Minister Narendra Modi on Monday to make significant announcements about funding a car plant that would manufacture a more reasonably priced model. Musk’s “very heavy Tesla obligations,” however, forced the postponement of the meeting; a new date is planned for later this year.
OLA WAS ORDERED TO GIVE A MAN IN HYDERABAD RS. 1 LAKH. READ WHY?
Prior to this, Musk declared that Tesla will “definitely” construct a factory in Mexico, albeit the exact date would depend on how the economy and interest rates would effect the affordability of the vehicles. It was anticipated that first construction would start last year.
Analysts warn that after years of double-digit growth rates, Tesla will likely have difficulties increasing capacity and will likely see a drop in sales. The business restated that in comparison to 2023, its car volume growth rate might be much lower in 2024.