Tesla has plans to introduce more affordable electric vehicle (EV) models in the first half of 2025. The cost of goods sold (COGS) per vehicle has been reduced to approximately $35,100, which is part of a broader strategy to launch new vehicles using current and next-generation platforms.
These lower-cost models will be a combination of the existing Model 3 and Model Y, as well as elements from the next-generation Cybercab. They are expected to be priced lower than the current Model 3 and Model Y offerings. However, there has been confusion about the specifications of these new models, particularly regarding the presence of steering wheels.
CEO Elon Musk clarified that all Tesla vehicles, including future models, are designed with robotaxi capabilities in mind. The starting price for these new models is expected to be around $30,000 after incentives, translating to a pre-incentive price of around $37,500. This pricing strategy raises questions about whether these vehicles can truly be considered "cheaper" options.
The challenge of reintroducing a lower-cost Model 3 variant at a price point of $37,000 is significant, given the current market dynamics. Tesla's position in the EV market is being scrutinized as competition intensifies. While Musk claimed that no other EV manufacturer is making a profit, this overlooks the success of companies like BYD.
Tesla's success in introducing these new models will depend on its ability to balance cost reduction with maintaining its brand reputation for quality and innovation.