Tesla announced today that it remains committed to producing and launching “more affordable models” in the first half of 2025, although it did not provide any new details regarding the timeline or specifications for these vehicles. For several years, the automaker has teased the prospect of more budget-friendly options, notably a vehicle referred to by many as the “Model 2,” priced around $25,000.
The current entry-level model, the Tesla Model 3, is considered reasonably priced, yet anticipation has been building for a significantly cheaper alternative. Tesla had previously suggested that a revolutionary “unboxed” manufacturing method would facilitate lower production costs for this future model. However, earlier this year, CEO Elon Musk redirected the company’s focus toward the delayed Robotaxi project, leading to speculation about the cancellation of the $25,000 vehicle. While Musk initially denied these reports, they were later confirmed as accurate by Reuters.
Despite the shift in focus, Tesla continues to emphasize its pursuit of more affordable models, albeit with less revolutionary features than previously envisioned. In today’s earnings report, the company reiterated its plans, stating:
“Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025. These vehicles will utilize aspects of the next generation platform as well as aspects of our current platforms and will be able to be produced on the same manufacturing lines as our current vehicle lineup.”
This approach is expected to yield lower cost reductions than initially anticipated but allows Tesla to prudently increase production volumes in a more capital-efficient manner during uncertain economic conditions. The company aims to fully utilize its expected maximum capacity of nearly three million vehicles, targeting more than 50% growth in production compared to 2023 before investing in new manufacturing lines.
Furthermore, Tesla confirmed that its purpose-built Robotaxi will continue to follow a revolutionary “unboxed” manufacturing strategy, although specific details about this project remain scarce.
The report also noted that Tesla’s “Next Gen Platform” is still “in development” for production in various regions worldwide. Currently, Tesla operates manufacturing facilities in California, Texas, Shanghai, and Berlin, positioning itself to scale production effectively as it seeks to meet growing demand in the EV market.
