By Hyunjoo Jin and Akash Sriram
(Reuters) -Tesla said on Tuesday it would introduce “new models” using current platforms and production lines in early 2025, as it backed away from more ambitious plans to produce an all-new model expected to cost $25,000 .
Talk of new offerings on an accelerated timeline sent Tesla (NASDAQ:) shares soaring in after-hours trading, a much-needed boost after months of decline in which Tesla faced stiff competition and declining sales. The gains came despite Tesla reporting first-quarter results that exceeded Wall Street expectations.
Chief Executive Elon Musk declined to provide details about the new vehicles but said they would include cheaper models that would go into production in early 2025. That’s just ahead of the goal Musk previously set for the launch of the all-new, low-cost model commonly known as the Model 2.
Reuters exclusively reported on April 5 that Tesla had scrapped plans for the Model 2, which investors had expected would fuel Tesla’s growth into a mass-market automaker. Musk initially responded to that story with a post on his social platform X saying, “Reuters is lying,” without pointing out any inaccuracies.
On Tuesday, neither Tesla nor Musk responded directly to the Reuters report.
Instead, they discussed unidentified new models that appeared to be different products, without saying how many, what type, or their target prices.
The new models would be built on Tesla’s current production lines and use “aspects” of the current platform and a next-generation platform, Tesla said. It warned that this plan “could result in less cost savings than previously expected,” suggesting the vehicles could cost consumers more than the Model 2’s expected price of $25,000.
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The automaker said its plan for new models would allow it to better control capital spending in “uncertain times.”
Tesla engineering chief Lars Moravy said the company would avoid the risk of investing in a “revolutionary” manufacturing process. Musk has previously said the all-new, affordable car would be a testing ground for manufacturing innovation.
Moravy said Tesla’s work on the next-generation affordable car is “transferable” to the vehicles the automaker now plans to launch early next year.
“We’re not trying to just throw that technical work away,” Moravy said. “We’re going to take it and use it.”
Musk declined to answer an analyst’s question about whether the new vehicles would be entirely new models or modifications to existing vehicles.
“I think we’ve said everything we want on that front,” Musk said.
One observer took Tesla’s comments about new models as confirmation that it had halted plans for the Model 2.
“It seems clear that the new vehicle platform is shelved for now,” said Sam Abuelsamid, an analyst at Guidehouse Insights. “The next generation vehicle would need to use fundamentally different manufacturing processes than current models. Without a desire to spend billions on new production facilities or retool existing factories, it appears Tesla will continue to build current products.”
Currently, Tesla’s Model 3 and Model Y, with starting prices around $40,000, are the only volume sellers.
ROBOTAXIS ON THE AIRBNB, UBER MODEL
Tesla also mentioned a “purpose-built robotaxi product” that it planned to build with a “revolutionary” manufacturing process, without giving a timeline for its release. The April 5 Reuters story reported that Tesla planned to continue developing a self-driving robotaxi on the same platform it developed for the Model 2.
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Musk devoted much of the call to analysts to outlining ambitious visions for diversifying Tesla’s business into artificial intelligence, humanoid robots and operating a fleet of millions of autonomous vehicles – all based on software and hardware products that the automaker has yet to develop. has not fully developed.
Tesla “should be viewed as an AI robotics company,” not a car manufacturer, Musk said.
The statement implies a substantial change in Tesla’s fundamentals. More than 80% of Tesla’s turnover in the first quarter came from the sale of electric cars.
Musk said Tesla’s self-driving fleet will be “a combination of Airbnb and Uber (NYSE:).” Some vehicles will be owned and operated by Tesla, others will be vehicles owned by individuals but rented on Tesla’s network.
The comments echoed a presentation by Musk in 2019, when he said a “robotaxi network” would be operational by 2020.
The 12.5% rise in Tesla shares in extended trading added about $57 billion to Tesla’s market cap, reversing some losses from a more than 40% decline so far this year.
‘SHOW-ME STOCK’
Tesla’s plan for more affordable cars pleased investors despite weak quarterly results after the bell. But some remained skeptical.
“Sounds promising, but Tesla is increasingly becoming a show-me stock given the many delays we’ve seen in previous rollouts,” said Jay Woods, chief strategist at Freedom Capital Markets. “If they can make this happen, then this will be a great development.”
The more modest strategy could also save Tesla significant investment in a redesigned car and new production lines to build it. Tesla’s decision to hit the brakes on increasing production capacity mirrors similar decisions at General Motors (NYSE:) and Ford Motor (NYSE:) in response to slowing growth in electric vehicle demand in the United States and intensifying competition from Chinese EV manufacturers in the world’s largest companies. car market.
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“Global electric car sales remain under pressure as many automakers prioritize hybrids over electric cars,” Tesla warned.
Tesla’s quarterly revenue fell for the first time since 2020, as the COVID-19 pandemic hampered production and deliveries.
The company on Tuesday reported revenue of $21.3 billion for the three months ended in March, compared with $23.33 billion a year earlier. Analysts had estimated an average of $22.15 billion, according to LSEG data.
Tesla’s average revenue per vehicle delivered in the quarter fell nearly 5% from a year ago to $44,926 per vehicle, reflecting the impact of repeated price cuts.
Net income in the first quarter was $1.13 billion, compared to $2.51 billion a year earlier.
Tesla kicked off the second quarter by announcing it will lay off more than 10% of its global workforce and cut car prices in key markets such as the United States, China and Europe.
