Tesla Charts New Course for 2025 with Affordable EVs and Self-Driving Expansion
Tesla is gearing up for a pivotal year in 2025, with a strategy centered on launching more affordable electric vehicles (EVs) and expanding its Full Self-Driving (FSD) service, according to recent announcements.
Although the exact models remain unconfirmed, the company plans to introduce these ‘more affordable’ vehicles in the first half of 2025. According to the carmaker, these models will incorporate elements from both its next-generation platform and existing platforms, utilizing current manufacturing lines. Speculation suggests these could potentially take the form of the rumored Model Q, with an estimated starting price around $30,000.
Tesla’s approach to leveraging existing and next-gen platform components allows for manufacturing efficiency. While it is expected to result in less cost reduction than initially projected, this strategy helps Tesla “grow vehicle volumes in a more capex [capital expenditure] efficient manner during uncertain times,” the company said.
Self-Driving Service Expansion
In addition to new vehicle plans, Tesla is also expanding its autonomous driving capabilities. Elon Musk announced that a paid, unsupervised Full-Self Driving service will launch in Austin, Texas, starting in June. Musk has also hinted at potential expansion to other cities.
Financial Performance in 2024 and Outlook
Tesla reported a challenging financial year in 2024. Global sales experienced a decline for the first time in over a decade, impacting the company’s earnings. Total revenue for Q4 2024 was $25.707 billion, falling short of Wall Street expectations. Net income for the quarter also dropped significantly, decreasing by 71 percent to $2.3 billion.
Overall, Tesla’s profits took a hit in 2024. Net income dropped to $8.4 billion, marking a 23% drop from 2023. However, total revenue for 2024 managed a slight uptick, reaching $97.7 billion, a modest 1% increase over the previous year’s record.
Despite these challenges, during the earnings call, Tesla presented a more optimistic outlook for 2025. The company emphasized its commitment to launching affordable EVs and making advancements in self-driving technology. Furthermore, Tesla highlighted a milestone – reducing the average cost of building its vehicles to below $35,000.
During the earnings call, Musk also mentioned that several car manufacturers have expressed interest in licensing Tesla’s FSD system, but provided no further details.
