Tesla is accelerating its plans for a range of new electric vehicles, including “more affordable models,” the automaker said in a memo to investors on Tuesday. New models that were previously scheduled to go into production in the second half of 2025 will now launch before then, the company said, implying production will begin much sooner.
It’s unclear whether the new, affordable models are the same mysterious “next-generation” vehicle that Tesla previously hinted was in the works, or a new lineup. The company’s stock price rose more than nine percent in after-hours trading Tuesday night.
The change in plans comes after a troubled few months for Tesla, which has faced lagging electric vehicle sales in the United States and the growing global dominance of its Chinese rivals. The company’s results released today showed that vehicle deliveries and total revenue fell 9 percent in the first three months of 2024 compared to the same quarter last year. This marks Tesla’s first sales decline since pandemic-plagued 2020 and its biggest year-over-year revenue drop since the beginning of the years.
Tesla did not provide details on the affordable vehicles in the pipeline or how far ahead its plans have been. But it revealed in Tuesday’s memo that to speed up production of new models it will reduce its ambitions for new manufacturing technology.
For years, CEO Elon Musk has touted the company’s innovative approach to car manufacturing. In 2023, he promised that his next generation of vehicles would not be produced by the classic Henry Ford-style production line, but by a new, cheaper “boxless” method that would allow parts to be assembled simultaneously in different parts of a factory. . Executives said this new approach would save the automaker on labor and production costs.
The new vehicles scheduled for delivery in mid-2025 will be produced on the same manufacturing lines Tesla currently uses, the company said Tuesday, using a combination of old and new engineering methods. That won’t reduce manufacturing costs as much as a broader manufacturing revamp, the automaker admitted, “but it will allow us to prudently increase our vehicle volumes… in uncertain times.”
The company said its previously announced future robotaxi vehicle will continue to be built using “a revolutionary ‘boxless’ manufacturing strategy.” Musk introduced a new name for the future vehicle in a call with investors on Tuesday, calling it the Cybercab.
This isn’t the first time Tesla has scaled back its big manufacturing plans. In 2016, Musk announced that the Tesla Models 3 and Y would be built using a fully automated factory called “alien battleship.” But in 2018 it became clear that Tesla would continue to employ humans on its manufacturing lines. The resulting chaos, which WIRED reported forced workers to hand-carry car parts to their stations, contributed to Tesla’s near-bankruptcy.
Reuters reported earlier this month that Tesla plans to build a more affordable car they were canceled as the automaker pivoted to focus on building a robotaxi and improved autonomous driving products. CEO Elon Musk disputed the story about X, but confirmed that Tesla would hold a robotaxi unveiling event in August.
Last week, Tesla said it would lay off about 10 percent of its global workforce, and two senior executives Leave the company. On Tuesday the company reported thousands of job losses to state agencies in California, Texas and New York. The automaker said in Tuesday’s memo that it was also affected by the closure of shipping routes in the Red Sea during the conflict between Israel and Hamas, and by an alleged arson attack that leveled its German factory for days.
Also last week, the automaker recalled all 4,000 Cybertrucks it had previously delivered after a soap used in the manufacturing process allowed the accelerator pedal pads to become trapped.