Tesla has accelerated plans to produce a variety of cheaper vehicles as Elon Musk’s electric vehicle manufacturer attempts to compete with a wave Chinese manufacturers.
Production will begin next year. The company has said that it will “accelerate launch of new models…including more affordable models”.
Tesla’s shares rose more than 5pc after-hours despite the company having reported its biggest sales drop in over a decade.
Investors are waiting for news about a cheaper electric vehicle, which Mr Musk suggested could cost as little as $25,000 (£21.500). However, they have expressed concern that his focus is on an autonomous “robotaxi”.
Tesla announced on Tuesday night: “We’ve updated our future model line-up in order to launch new models faster than our previously communicated production start date of the second half 2025.”
The new models, which include more affordable versions, will use aspects of both the next-generation [manufacturing] platforms and our current platforms. They will also be able be produced on the exact same production lines as the current vehicle lineup.
This update may not result in the cost savings we had hoped for, but it allows us to grow our vehicle volume prudently… in uncertain times.”
Tesla reported that profits for the first quarter of this year dropped by 55pc, to $1.1bn. Revenues fell by 8.7pc, to $21.3bn. This is the largest drop in over a decade.
The company was hit by a decline in demand for electric vehicles, rising interest rates that made purchases more expensive, and the closing of its German plant after an arsonist attack.
Before last night’s results, its shares had dropped by over 40pc in the past year.
Tesla, a pioneer of electric cars, has been squeezed by both a sagging demand from consumers for battery-powered automobiles and increased competition in particular from Chinese manufacturers.
It was briefly overtaken by China’s BYD as the world’s largest electric vehicle seller based on volume at the end of the last year, but it reclaimed that title by the beginning of 2024. BYD, along with other Chinese sellers, has dramatically reduced the price of new electric cars.
Mr Musk claimed that car manufacturers are pulling back from electric vehicles. Many other automakers are moving away from EVs in favor of plug-in hybrids. He said that he believes this is the wrong strategy and electric cars will eventually dominate the market.
He said that in the near future, self-driving cars would surpass human drivers. “It’s only a question of time until we surpass the reliability of human drivers.” “And not for long at all,” he added.
Mr Musk stated that Tesla is in talks with other automakers about licensing Tesla’s technology.
Electric car sales in Britain dropped to 15.2pc in March from 16.2pc in March of last year. Tesla announced earlier this month that it delivered 386.810 cars during the first quarter of the year. This is significantly lower than the 422,875 vehicles it sold a year ago.
Last week, Mr Musk cut about 14,000 jobs — around 10% of Tesla’s staff. Tesla’s chief executive said the cuts were “difficult”. The company has cut prices on its new cars to try and boost sales. It also slashed the price of the “full-self-driving software upgrade”.
In an effort to revive sales, Mr Musk has placed a large bet on artificial intelligence and driverless software.
He said that Tesla’s efforts to develop self-driving vehicles and robots with humanoid features may make it the most valuable company in the world, though analysts have expressed concern about the fact that these efforts could come at the expense of the long-awaited affordable vehicle.
Musk promised that he would unveil the Tesla driverless car in August, even though there were questions raised about its capabilities. After US safety regulators enquired, the company updated its driver assist software multiple times.
Last week, the company was forced to recall its Cybertruck pick-up truck due to concerns over defective brake pedals.
Tesla’s stock slump has seen Mr Musk lose his title as the richest man in the world. His net worth has fallen from $229bn dollars to $164bn dollars so far this year.
Last week, he asked his shareholders to reinstate the $56bn compensation package that was blocked by a Delaware court and to relocate the company from Delaware to Texas.