Tesla is accelerating production of cheaper models

Tesla is accelerating production of cheaper models

Tesla is responding to weak market demand and growing competition from China by pushing forward the production of cheaper models faster than planned. Elon Musk, the head of the US electric car company, has announced that the introduction of the cheaper Tesla models will be brought forward. Originally planned for the second half of 2025, production is now expected to be accelerated to the beginning of 2025 or even the end of 2024.

The exact details about the new electric cars and which models will support Tesla's low-price offensive have not been fully disclosed. These “more affordable models” will be produced using existing equipment and will adopt some features of the current models. However, a specific price tag has not yet been announced, although investors expect the vehicle, dubbed the “Model 2,” to cost around $25,000.

Weakening demand in the electric car market and growing competition, particularly from Chinese manufacturers such as BYD and Nio as well as established carmakers such as VW, have prompted Tesla to take pricing measures. However, this has already led to a decline in profits. Tesla is also planning to cut jobs, with more than 10 percent of jobs to be cut worldwide, including around 400 jobs at the Grünheide plant in Germany.

In addition to the price offensive, Tesla is also planning to build a robotaxis on its compact car platform. Even if some experts doubt the feasibility of this project, as the General Motors subsidiary Cruise has stopped operating its automated driving service due to technical difficulties, Tesla is still working on this new automotive technology. With the company's current financial figures for the first quarter of 2024 showing declining sales and profits as well as a reduced gross margin, Tesla is still striving to strengthen its position in the electric car market.