Tesla now pursuing affordable EVs instead of a low-cost EV

Tesla has paused its horses on the next-generation platform and a low-cost vehicle, instead, it wants to pursue more affordable electric vehicles (EVs).

CEO Elon Musk said Tesla has accelerated the plan to launch new models by late 2024 or early next year. This strategy enabled the company to cut a previously speculated late 2025 production window. However, there’s no detail on the new models.

A low-cost Tesla model became a trending topic since last year. This matter was also kept alive by the statements of the company’s CEO.

The EV industry has entered a sales slowdown and companies are overturning their plans to invest further in this market. Major automakers including GM and Ford also step back their future EV investment.

The key reason for this fallout is the price point, which is considered too high for new buyers. The government offering tax credits and state subsidies on new EV purchases, which doesn’t change prices much. However, companies are finding their way toward a low-cost platform, which could potentially resolve the sales crisis.

In December, Musk said that his company is working on a low-cost model that will be made at a very high volume, during an interview with Sandy Munro, owner of Munro & Association, at Munro Live.

The Tesla chief promised that this new car would exceed people’s expectations and “It’s not like any car production line that anyone’s ever seen”. This model was planned to be manufactured in Texas on a brand-new production line. Earlier this year, Musk reiterated plans to launch an entry-level EV by 2025 during the 2023 full-year earning results. It was estimated to start production in the second half or by the end of 2025.

Canceled?

A report from early April revealed that Tesla shelved plans to produce a low-cost model. Instead, the company wants to work on an entirely new segment called Robotaxi.

These are autonomous ride-hailing vehicles and are used for public transportation. GM’s Cruise and Alphabet’s Waymo are the two examples in this field but the area of operation is limited to a few states.

In his opening remark during the 2024 first quarter results, Musk explained that Tesla will launch new vehicles including more affordable models. These new cars will use technologies from the next-generation and existing platforms.

These new models will be produced at existing manufacturing lines as the current models. The company confirmed that it’s not focusing on production line expansion for new vehicles.

Cost saving:

These statements prioritize two words “efficiency” and it could be said that Tesla wants to save some cost production over its previous plans. In that case, the company wants to utilize the existing production line and might refrain from making any significant changes in production sites for this particular goal.

Eventually, Musk has not denied a low-cost model but there’s no confirmation either.