Tesla Revises Plans for Affordable Electric Cars, Focusing on Current Production Lines

In a surprising turn of events, Tesla has announced a change in its product plan for introducing more affordable electric vehicles. Rather than building these cheaper models on a new production platform, the company has decided to utilize its existing manufacturing lines.

Tesla’s “Next-Generation Vehicle Platform” and “Unboxed” Manufacturing For some time, Tesla had been working on a “next-generation vehicle platform” that was expected to enable a new, cost-effective manufacturing process called “unboxed.” This platform was intended to produce two highly anticipated vehicles:

• A model cheaper and smaller than the Model 3, often referred to as the “$25,000 Tesla” or “Model 2”
• The Tesla Robotaxi, a purpose-built vehicle designed from the ground up for self-driving capabilities

Conflicting Reports and Elon Musk’s Response Recently, Reuters reported that “Tesla has canceled the long-promised inexpensive car,” which CEO Elon Musk vehemently denied, calling the publication “liars.” However, reputable news sources reported that Tesla had indeed halted work on the planned cheaper vehicle, codenamed NV9, based on information from inside sources who confirmed that Musk had canceled a Gigafactory Texas expansion for the project.

Confirmation of Changes in Q1 2024 Financial Results With the release of its Q1 2024 financial results, Tesla officially confirmed the change in plans for its more affordable electric vehicles. The company stated, “We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.”

Utilizing Current Platforms for More Affordable Models Tesla clarified that the new vehicles, including the more affordable models, will incorporate aspects of both the next-generation platform and the company’s current platforms. Crucially, these vehicles will be produced on the same manufacturing lines as Tesla’s current lineup.

The company explained the rationale behind this decision, stating, “This update may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times. This would help us fully utilize our current expected maximum capacity of close to three million vehicles, enabling more than 50% growth over 2023 production before investing in new manufacturing lines.”

Robotaxi Still still pursuing its “Unboxed” Manufacturing Strategy Despite the changes in plans for the more affordable models, Tesla confirmed that its previously announced Robotaxi will still be built using the revolutionary “unboxed” manufacturing system. Musk has previously announced that Tesla plans to unveil the new Robotaxi on August 8th.

The Impact on Tesla’s Future While the change in plans may result in less cost reduction than initially anticipated, it allows Tesla to grow its vehicle production more efficiently during uncertain economic times. By utilizing its current manufacturing lines, the company can maximize its production capacity and achieve significant growth without the need for immediate investment in new production facilities.

As Tesla continues to navigate the ever-evolving electric vehicle market, this strategic shift in its product plan demonstrates the company’s flexibility and adaptability in the face of changing circumstances.

With the Robotaxi still on track to pursue the innovative “unboxed” manufacturing strategy and the more affordable models now set to be produced on existing lines, Tesla remains committed to making electric vehicles more accessible to a wider audience while maintaining its position as a leader in the industry.

The Information is Taken from WION, Techcrunch and Electrek