Tesla announced that it was about to release an “unprecedented” electric car model earlier than planned, the stock price immediately increased

Yesterday (April 23), Elon Musk’s automaker informed investors that sales and revenue are falling but “affordable new car models” are something Tesla has never seen. will be released before mid-2025, earlier than originally expected.

Tesla is accelerating plans to develop a new line of electric vehicles, including “more affordable models,” the automaker said in a memo to investors on April 23. The company said new models previously scheduled to begin production in the second half of 2025 will now launch before then, implying that production will begin much sooner.

It’s unclear whether the new, affordable models are the mysterious “next generation” cars that Tesla previously hinted were in development or a new product line. Tesla leaders declined to share detailed information about their new vehicle development plans in a call with investors on April 23. However, Tesla’s stock price rose more than 9% in after-hours trading late yesterday.

The change in plans comes after a difficult few months for Tesla. The company has faced a decline in electric vehicle sales in the US and the growing global dominance of Chinese rivals. Results the company announced on April 23 showed that both vehicle deliveries and total revenue decreased by 9% in the first three months of 2024 compared to the same period last year. That marked Tesla’s first sales decline since a difficult pandemic-plagued 2020 and its biggest quarterly revenue decline ever.

Tesla did not provide details about the affordable model in production or how much of its planning is already underway. But they revealed in a memo on April 23 that to speed up production of new car models, they will cut back on ambitions for new production technology.

For years, CEO Elon Musk has praised the company’s groundbreaking approach to auto manufacturing. In 2023, he promised that the next generation of cars would be produced not with Henry Ford’s classic production lines but with a new, cheaper “out of the box” method that would allow components to be assembled at the same time in different places in the factory. Elon Musk said this new approach will save labor and production costs for the automaker.

Instead, the new cars scheduled for delivery in mid-2025 will be produced on the same production lines that Tesla currently uses using a combination of new and older engineering methods. That won’t cut manufacturing costs as much as a broad-based production improvement, the automaker admitted, “but allows us to cautiously increase our vehicle inventory…during market times.” unpredictable fluctuations”.

The company said its previously announced future robotaxi vehicle will still be built using its revolutionary “out of the box” manufacturing strategy. Musk debuted the new name for the future vehicle in a call with investors on April 23, calling it Cybercab.

This isn’t the first time Tesla has scaled back major production plans. In 2016, Musk announced that Tesla’s Model 3 and Y would be built using a fully automated factory that was dubbed a “terrible alien plane.” But by 2018, it became clear that Tesla would continue to use humans on its production lines.

In early April, Reuters reported that Tesla’s plans to build affordable cars had been scrapped as the automaker focused on building a robot taxi and improving its driving products. automatic. CEO Elon Musk disputed Reuters’ information on social network X (formerly known as Twiter) but confirmed that Tesla will hold a robotaxi launch event in August.

Last week, Tesla said it would lay off about 10% of its global workforce and two top executives left the company. On April 23, the company reported thousands of job losses to state agencies in California, Texas and New York. The automaker said in the April 23 memo that it was also affected by the closure of the Red Sea shipping lane during the Israel-Hamas conflict and the suspected arson attack. causing their German factory to collapse for days.

Also last week, Tesla recalled all 4,000 Cybertrucks it had previously delivered, after a grease used during production caused the pads on its accelerator pedal to jam.

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