Tesla promised “more affordable models” in the first half of 2025. Where are they?
Production was supposed to start by the end of June, but there’s been no word on development and Tesla has been releasing more expensive models instead.
In Tesla’s first-quarter earnings report, the company reiterated something it’s been saying for a while: it would be launching its long-awaited lower-cost cars soon.
“Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025. These vehicles will utilize aspects of the next generation platform as well as aspects of our current platforms and will be produced on the same manufacturing lines as our current vehicle lineup.”
On the earnings call in April, when asked about the status of those models, the company’s VP of vehicle engineering, Lars Moravy, said:
“We’re still planning to release models this year. As with all launches, we’re working through like the last-minute issues that pop up... At this point, I would say that the ramp might be a little slower than we had hoped initially, just kind of given the turmoil that exists in the industry right now, but there’s nothing blocking us from starting production within the timeline laid out.”
Moravy also pretty much confirmed what many had suspected: the more affordable models would be stripped-down versions of existing models rather than anything new.
The need for cheaper cars has become especially acute after Telsa canned its long-awaited $25,000 car last year. Big federal tax credits are also likely to go away under the Trump administration, making existing models less affordable. With an aging lineup and low-cost competition eating into the company’s top and bottom lines, the cheaper versions of existing models seemed like a nice middle ground for investors.
But we’re just days from the end of the first half of 2025 and, so far, Tesla has only released more expensive versions of its existing lineup, including a pricier Model Y and, more recently, a Model S and Model X that cost $5,000 more than the originals.
The company hasn’t made any announcements about having begun production on the cheaper lineup — something that would be in the stock’s best interest. Last week, Business Insider reported that the company would shut down production at its Texas factory, where it produces the Model Y and Cybertruck, for the second time in two months, a move that could be indicative of lower demand. Of course, it could theoretically also mean the company is changing things in the factory to build the new cars. We don’t know. Tesla hasn’t responded to a request for comment about the timeline for its affordable models.
While Morningstar strategist Seth Goldstein says it’s looking more and more likely that Tesla is going to blow its first-half deadline, he does think lower-cost models will be produced sometime this year.
“Of course, every month the new vehicle launch is delayed makes it more likely that Tesla will see lower sales this year,” Goldstein said. Analyst consensus expects Tesla’s vehicle sales to drop for the second year in a row.
Tesla, meanwhile, has been wrapped up in its robotaxi launch, a technology the company sees as central to its future. And perhaps investors are, too.
“Investors won’t care about that,” CEO and founder of GLJ Research and Tesla bear Gordon Johnson told Sherwood News, referring to the once important low-cost models. “Everyone is focused on robotaxis.”
Indeed, Tesla’s stock popped yesterday on what was a mostly successful launch this weekend.
