Tesla is accelerating plans for a lineup of new electric vehicles, including “more affordable models,” the automaker said in a memo to investors Tuesday. New models previously slated to start production in the second half of 2025 will now launch before then, the company said, implying production will start much earlier.
It’s unclear whether the new, affordable models are the same mysterious “next-gen” vehicle that Tesla has previously hinted was in the works, or a new lineup. Executives declined to share details on their plans for new vehicles during an investor call Tuesday. Tesla’s stock price rose by more than 9 percent in after-hours trading late Tuesday.
The change in plans comes after a troubled few months for Tesla, which has faced a lag in US EV sales and the growing global dominance of Chinese rivals. Company results released today showed that both vehicle deliveries and total revenue fell 9 percent in the first three months of 2024 compared to the same quarter last year. That marks Tesla’s first drop in sales since pandemic-troubled 2020 and its largest fall in revenue year-on-year since the early aughts.
Tesla did not provide details of the affordable vehicles in the works or how much its plans have been pulled forward. But it disclosed in Tuesday’s memo that to accelerate production of new models it will cut back its ambitions for new manufacturing technology.
For years, CEO Elon Musk has touted the company’s path-breaking approach to auto manufacturing. In 2023, he promised that its next generation of vehicles would be produced not by the classic, Henry Ford-ian production line, but by a new, cheaper “unboxed” method that would allow parts to be assembled simultaneously in different parts of a factory. Executives said this new approach would save the automaker labor and production costs.
The new vehicles slated for delivery before mid-2025 will instead be produced on the same manufacturing lines Tesla currently uses, the company said Tuesday, using a combination of new and older engineering methods. That won’t cut manufacturing costs as much as the wider manufacturing revamp, the automaker admitted, “but enables us to prudently grow our vehicle volumes … during uncertain times.”
The company said that its previously announced future robotaxi vehicle will still be built using “a revolutionary ‘unboxed’ manufacturing strategy.” Musk debuted a new name for the future vehicle on a call with investors Tuesday, calling it a Cybercab.
This isn’t the first time Tesla has scaled back grand manufacturing plans. In 2016, Musk announced that Tesla’s Models 3 and Y would be built using a fully automated factory dubbed an “alien dreadnought.” But by 2018 it was clear that Tesla would keep employing humans on its manufacturing lines. The resulting chaos—which WIRED reported left workers to carry car parts to their stations by hand—contributed to Tesla’s near-bankruptcy.
Reuters reported earlier this month that Tesla’s plans to build a more affordable car were canceled as the automaker pivoted to focus on building a robotaxi and improved autonomous driving products. CEO Elon Musk disputed the story on X, but confirmed that Tesla would hold a robotaxi unveiling event in August.
Last week, Tesla said it would lay off some 10 percent of its global workforce, and two top executives left 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 has also been affected by shipping route shutdowns in the Red Sea during the Israel-Hamas conflict, and by a suspected arson attack that brought down 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 pads on their accelerator pedals to become trapped.
Updated 6:50 pm EDT 4-23-2024: This article was updated with additional information from Tesla’s investor call.
