Tesla expects slow growth in 2024, preparing a new launch for 2025

Tesla is expecting a slow growth of its electric vehicle (EV) business in 2024 due to switching demand for price-effective vehicles.

The EV maker on Wednesday shared its full-year results for 2023 and confirmed that it slipped sales and profit revealing that the cost of goods sold per vehicle declined sequentially in the fourth quarter last year.

Tesla said that the lower raw material costs and U.S. Federal Tax credit helped to reduce cost-per-vehicle. On the other hand, costs for Cybertruck and other AI projects increased.

Lower projection is part of the new competition raised by the Chinese companies, where Tesla had much of the upper hand. The cost-effect-vehicle options from car makers such as BYD are taking customers away from the U.S. EV company.

Tesla Model 3 Electric Vehicle (EV)

Tesla also has plans to release a new entry-level EV by next year. During the earnings call, CEO Elon Musk said that the company could start the production of a lower-cost vehicle somewhere in the second half of 2025.

“I’m often optimistic regarding time. But our current schedule shows that we will start production toward the end of 2025, sometime in the second half” Musk told analysts.

A report from earlier hinted that the company has codenamed this new Tesla model “Redwood” and it may be a compact crossover. Tesla has not confirmed any details regarding the name or the design scheme during the earning call.

However, Musk mentioned that vehicle production would take “a tremendous amount of new revolution technology”.

Tesla warned of “notably lower” sales growth in 2024 as it is now focusing on the new vehicle. Tesla is putting some heavy expectations with the new vehicle as it could drive more sales for the electric car maker because of its affordability aspect. The carmaker has not shared any price segment to launch the 2025 Tesla model.

(via – Yahoo)