Tesla’s Affordable EV: The Saga Continues
For years, Tesla and its CEO, Elon Musk, have been promising an electric vehicle (EV) with a price tag accessible to the average consumer. The initial target was a $25,000 car, a move designed to significantly broaden the appeal of EVs. This ambition has been a recurring theme, dating back to Musk’s 2018 interview with YouTuber Marques Brownlee. He reiterated the goal at the 2020 Battery Day, envisioning the production of millions of these affordable vehicles.
The Tesla Cybertruck in a showroom.
A new manufacturing process, known as the “Unboxed Process,” emerged as a key element of this strategy. Tesla executives highlighted its potential to significantly reduce manufacturing costs, making the $25,000 price point a realistic possibility. The next-generation vehicle is expected to be a crossover or hatchback and could feature design cues from the Cybertruck.
Production and Financial Outlook
Tesla’s financial performance in the fourth quarter of 2023 showed a revenue increase to $25.2 billion, while net income reached $7.9 billion. However, the company indicated that the vehicle volume growth rate in 2024 might be lower than in 2023, partly due to the preparations for launching the next-generation vehicle. During the earnings call, Musk aimed for production to start near the end of 2025, although he cautioned about potential delays due to the manufacturing complexities.
Design sketches for a future Tesla.
Concerns were raised by investors regarding delays in the low-cost EV plan. Responding to these worries, Musk stated that Tesla has updated its future vehicle lineup to accelerate the launch of new models. The initial manufacturing site for this vehicle is planned for Gigafactory Texas.
Robotaxi and Production Plans
Tesla is also working on its robotaxi project. Musk announced the unveiling of the long-promised robotaxi for August 8th, 2024. This autonomous vehicle is designed to run on Tesla’s next-generation vehicle platform providing a fully self-driving service. Simultaneously, reports surfaced that Tesla had supposedly canceled the affordable EV project to concentrate. This news, however, has been subject to speculation.
Two Tesla Model 3s driving on a mountain road.
Recent reports indicate that Tesla is aiming to launch the production of a new mass-market compact crossover around June 2025, potentially producing 10,000 units weekly. However, the final pricing and detailed features remain undisclosed, and there is an awareness that the production timeline has been pushed back. The company is also developing advanced manufacturing techniques, such as die-casting the underbody in a single piece, to lower production costs and enhance efficiency.
An assembly line of Tesla Model Y vehicles at the Texas Gigafactory.
The Future of Affordable EVs
Tesla’s promise of a $25,000 EV represents a pivotal moment for the electric vehicle industry. If successful, it could redefine how electric cars are produced and increase their accessibility. It’s a high-stakes effort to lower costs while also creating a sustainable energy future.
