Tesla’s Next-Generation EV: Key Details Revealed

3 Mins read

Investors have been expressing concerns about Tesla Inc.’s need for a lineup refresh in order to maintain growth in the face of declining demand for electric vehicles (EVs).

According to Tesla’s recent communication with Wall Street, the company predicts slower growth this year as it enters “two major growth waves.” The next-generation car is a pivotal component of the second wave.

Morningstar analyst Seth Goldstein emphasizes the necessity for Tesla to offer an affordable vehicle to sustain its rapid delivery growth. While Tesla has thrived in the luxury and entry-level luxury markets, it has yet to venture into the lower-end market.

Tesla’s stock has suffered due to its unclear 2024 guidance, as well as broader concerns regarding EV demand and the impact of price cuts on profit margins. Year-to-date, Tesla’s stock has declined by 27%, while it has decreased by 4% over the past 12 months. In comparison, the S&P 500 index has experienced gains of nearly 4% and 20% during these timeframes.

To shed light on what’s to come, here are four essential details about Tesla’s next-generation EV, often referred to as the Model 2:

How much will it cost?

There isn’t any official information regarding the exact price of the new car; however, experts anticipate that it will fall around $25,000 and must remain below $30,000.

Initially intended as a mass-market vehicle priced at approximately $30,000, the Model 3 currently serves as Tesla’s most affordable EV. The cheaper version of the Model 3 starts at around $39,000, while an all-wheel-drive, longer-range model can cost up to $50,000.

As additional safety and entertainment features are integrated into vehicles, prices across the industry have risen. The average price of a U.S. vehicle now stands at roughly $48,000.

When will it be available, and where will it be made?

Tesla provided some insight into the expected production start date for the next generation when reporting fourth-quarter earnings. However, specific details regarding availability and manufacturing locations have not been disclosed.

Tesla’s Next-Generation Vehicle: A Game-Changer in the Making

Tesla’s Chief Executive Elon Musk recently revealed some exciting updates about the company’s next-generation vehicle. During a post-results call, Musk stated that the company is already well on its way to developing this groundbreaking car and is planning to commence production in the second half of 2025.

In terms of manufacturing locations, Texas will be the initial production site, while Mexico is likely to become the second factory for this new electric vehicle (EV). Musk added that Tesla will also explore other international locations by the end of the year.

Despite Musk’s positive outlook, some analysts have expressed skepticism about the timeline. Toni Sacconaghi from Bernstein raised concerns in a note, referring to Tesla’s historical tendency to be overly optimistic when estimating timeframes.

Sacconaghi stated, “We believe high volume availability of Model 2 may only begin well into 2026, assuming the ramp is not as challenging as Tesla has experienced with its other new models (Cybertruck, Model 3), which is not assured.”

Unveiling Tesla’s Next-Gen Platform

During an analyst event titled “Master Plan 3” in March, Tesla confirmed that it was actively developing a next-generation platform. However, specific details regarding this new car and its financial aspects remained scarce.

This lack of information resulted in disappointment among Wall Street investors, who desired more transparency. They criticized Tesla for being vague about the next-generation vehicle and its financial implications.

On the recent post-results call, Musk refrained from divulging too many details about the car, emphasizing that it was an earnings call rather than a product announcement. Nevertheless, he expressed immense enthusiasm not only for the upcoming vehicle but also for the innovative manufacturing process behind it.

According to Musk, “This is a revolutionary manufacturing system, far more advanced than any other automotive manufacturing system in the world, by a significant margin. Several years ago, I said perhaps the most important competitive characteristic of Tesla in the future will be manufacturing technology. And you will really see that come to bear with our next-gen vehicle.”

Tesla’s next-generation vehicle promises to reshape the automotive industry with its cutting-edge manufacturing technology. While specifics are yet to be revealed, one thing is certain: Tesla’s determination to revolutionize both EVs and the way they are manufactured is unwavering.

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