Tesla is accelerating its plans for a lineup of new electric vehicles, including “more affordable models,” according to a memo to investors released on Tuesday. The automaker announced that new models previously scheduled to start production in the second half of 2025 will now launch before then, suggesting a much earlier production start. Whether these new, more affordable models are the same as the mysterious “next-gen” vehicle Tesla has hinted at previously or a new lineup remains unclear. Tesla’s stock price rose over 9% in after-hours trading late Tuesday following the announcement. This shift in plans comes amidst a challenging few months for Tesla, which has faced a slowdown in US EV sales and growing global dominance from Chinese rivals. The company’s first-quarter results, released on Tuesday, showed a 9% decline in both vehicle deliveries and total revenue compared to the same period last year. This marks Tesla’s first sales drop since the pandemic-stricken year of 2020 and its largest year-over-year revenue decline since the early 2000s. While Tesla did not provide specific details about the affordable vehicles in development or the extent of the production acceleration, it disclosed in Tuesday’s memo that it will scale back its ambitions for new manufacturing technology to expedite production of the new models. For years, CEO Elon Musk has touted the company’s groundbreaking approach to auto manufacturing. In 2023, he promised that its next generation of vehicles would be produced not on traditional Henry Ford-style assembly lines but through a new, more cost-effective “unboxed” method that would enable simultaneous assembly of parts in different sections of a factory. Executives claimed this approach would save the automaker labor and production costs. However, Tesla announced on Tuesday that the new vehicles slated for delivery before mid-2025 will instead be produced on the same manufacturing lines currently used by the company, employing a combination of new and older engineering methods. While this approach may not reduce manufacturing costs as significantly as a broader manufacturing overhaul, the automaker stated that it “enables us to prudently grow our vehicle volumes … during uncertain times.” Tesla emphasized that its previously announced future robotaxi vehicle will still be built using “a revolutionary ‘unboxed’ manufacturing strategy.” During a call with investors on Tuesday, Musk unveiled a new name for the upcoming vehicle: Cybercab. This is not the first time Tesla has scaled back ambitious manufacturing plans. In 2016, Musk announced that Tesla’s Models 3 and Y would be built in a fully automated factory dubbed an “alien dreadnought.” However, by 2018, it became clear that Tesla would continue employing human workers on its manufacturing lines. The resulting chaos—which WIRED reported forced workers to manually carry car parts to their stations—contributed to Tesla’s near-bankruptcy. Earlier this month, Reuters reported that Tesla’s plans to develop a more affordable car had been canceled as the automaker shifted its focus to building a robotaxi and enhancing autonomous driving technologies. CEO Elon Musk disputed the story on Twitter but confirmed that Tesla would hold a robotaxi unveiling event in August. Last week, Tesla announced plans to lay off approximately 10% of its global workforce, with two top executives departing the company. On Tuesday, the automaker reported thousands of job cuts to state agencies in California, Texas, and New York. In Tuesday’s memo, Tesla also acknowledged the impact of shipping route closures in the Red Sea during the Israel-Hamas conflict and a suspected arson attack that halted production at its German factory for several days. Additionally, last week, the automaker recalled all 4,000 Cybertrucks previously delivered after a soap used in the manufacturing process caused the pads on their accelerator pedals to become stuck.
Tesla Accelerates EV Production Plans, Pushing Forward Launch of Affordable Models
