Tesla to soon launch affordable EVs to shore up sales
What's the story
After witnessing its first annual sales decline since going mainstream, Tesla is poised to launch a range of "more affordable models" in 2025.
The company sold 1.79 million cars last year, a tad short of the 1.81 million vehicles it sold in 2023.
The new models are part of Tesla's plan to boost its annual production by over 60%, targeting an output of about three million cars per year.
Production plans
New models to enter production in H1 2025
Tesla has said that the new models will go into production in the first half of this year.
They will feature elements from both the current Model 3 and Model Y platforms as well as a new architecture unveiled by Tesla last summer.
The cars will be produced on the same assembly lines as Tesla's current models, meaning they won't be entirely new designs.
This will help keep costs low and increase production volume without requiring too much capital investment.
Model speculation
An evolution of existing designs
The fact that Tesla has not yet unveiled these new cars indicates they could be variants of the Model 3 and Model Y.
This speculation stems from Tesla's history of revealing all-new vehicles years before they actually go into production.
For example, the Cybertruck was first shown in 2019 but deliveries only started in November 2023.
Price range
Musk's comments hint at new models' pricing
Tesla CEO Elon Musk's remarks have given a glimpse into the possible pricing of these new models.
Back in October, when unveiling the Cybercab - a fully autonomous two-seater, Musk had said, "When we talk about a $25,000 electric car, it wouldn't make much sense to think about a model other than the Cybercab."
It is possible that the new cars could be priced around £30,000 (₹30 lakh), much lower than the £39,990 (₹40 lakh) Model 3.
Market competition
Tesla's upcoming models could rival Chinese EVs
The expected pricing of Tesla's new models could make them a competitor against Chinese players such as Nio and BYD.
This move would fit into Tesla's larger strategy of widening its market by introducing more affordable electric vehicles.
Tesla reported a 3% rise in its fourth-quarter adjusted profits, even as it missed Wall Street predictions. For the whole year, Tesla reported profits before one-time items of $8.42 billion, a 23% decline from last year.