- Tesla said it is accelerating the launch of new affordable Tesla vehicles, creating a major bump up in Tesla stock prices.
- This is excellent news for EV adoption, as the economy EV sector has had very few affordable EV models so far.
- The company plans to start production of its new affordable Tesla vehicles in “early 2025 if not late this year.”
Tesla news released this week included astoundingly great updates when it comes to EV adoption around the globe and in the US. In its 2024 first quarter report, the company said it is accelerating the launch of new affordable Tesla vehicles. Tesla CEO Elon Musk said that the company plans to start production of new affordable models in “early 2025 if not late this year.”
The world has been waiting for affordable EVs for a very long time, and because of that and other reasons, EV adoption is hitting a bottleneck in 2024. Industry analysts point to many reasons why EV sales growth is slowing. Most notable among the reasons is the lack of low-priced EV models, with mainly high EV prices. The lack of charging availability is another significant barrier to EV adoption.
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New Tesla Models Will Significantly Increase Adoption
Global technology intelligence firm ABI Research forecasted that global EV sales in 2024 will increase by 21% in 2024 and 19% in 2025. These numbers would be a significant decrease in growth over the last few years. In 2023, global EV sales grew 31%, down from a massive 60% growth in 2022. With the release of new Tesla models, global EV sales growth is expected to significantly increase.
The absence of lower-priced EV models has kept an entire, massive segment — the economy segment — from the ability to switch from internal combustion engine models to electric. Until now, Tesla has remained a luxury brand that is out of reach for many drivers. A low-cost car from Tesla will finally be available to those who can not afford the current Tesla lineup.
Tesla and BYD Are Leading EV Adoption
From 2008 to 2024, Tesla grew faster than any OEM in history. Other OEMs rushed to make their own BEVS, hybrid electric vehicles, and plug-in hybrid vehicles (PHEVs), but most struggled to compete with Tesla as the global leader. In 2023, the Model Y became the best-selling car globally, the first time an electric car held that record.
During this time, China became a world EV leader. In 2008, world-famous investor Warren Buffett invested in Chinese car company BYD, now a global leader in EV sales. BYD wrapped up 2023 with record-breaking sales volume, surpassing its 3 million annual sales target and becoming the global new energy vehicle sales champion for the second year in a row.
2024 Is a Bumpy Road for Tesla So Far
Here in 2024, Tesla is having a challenging year, as news broke about its global layoffs and other problems. CNBC reported Tesla’s revenue dropped from $23.33 billion last year and from $25.17 billion in the fourth quarter. The company’s net income dropped 55% to $1.13 billion (at 34 cents per share) from $2.51 billion (73 cents per share) a year ago.
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Tesla stock jumped in extended trading after the news broke that production of new, affordable Tesla models could begin sooner than expected.
Tesla’s investor deck included that the new affordable models will “be able to be produced on the same manufacturing lines” as Tesla’s current lineup of vehicles. Tesla aims to “fully utilize” its current production capacity and plans to achieve “more than 50% growth over 2023 production” before it invests in new manufacturing lines.
Tesla’s Recent Price Cuts for the US EV Market
Reuters reported that Tesla cut the U.S. prices of its Model Y, Model X, and Model S by $2,000 each this week.
The Model Y’s base variant price dropped to $42,990. The long-range and performance variants’ new prices are $47,990 and $51,490, respectively. The base trim of the Model S is now $72,990, and its Plaid variant is $87,990. The Model X base variant is now priced at $77,990, and its Plaid variant costs $92,900.
Tesla Robotaxi and Self-Driving
Information about Tesla’s proposed robotaxi ride-hailing service was included in the investor deck. Recently, Tesla cut the price of its full self-driving (FSD) to $8,000 from $12,000.
In September 2023, Tesla had cut the FSD price from a peak of $15,000.
Self-Driving vs. Broad EV Adoption
The big question now is how much Tesla will spend on self-driving vs. EV adoption. Every gas-powered vehicle around the world that moves across land, air, or sea needs to quickly transition to electric, to fight climate change and ensure a healthy environment for future generations. When one considers the monumental challenge and overwhelming implications of this, Tesla’s spending on self-driving at present doesn’t make sense.
If Tesla really cares about saving the environment, it should focus on affordable EV production, while delaying self-driving.
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IMAGES: TESLA, ELECTRIFY EXPO
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One Response
Stability at the helm is sorely lacking, Musk has got to go.