Tesla Promises ‘More Affordable Models’ and a ‘Cybercab’

Tesla is accelerating plans for a lineup of new electric vehicles, including “more affordable models,” the automaker said in a memo to investors Tuesday. New models previously slated to start production in the second half of 2025 will now launch before then, the company said, implying production will start much earlier.

It’s unclear whether the new, affordable models are the same mysterious “next-gen” vehicle that Tesla has previously hinted was in the works, or a new lineup. Executives declined to share details on their plans for new vehicles during an investor call Tuesday. Tesla's stock price rose by more than 9 percent in after-hours trading late Tuesday.

The change in plans comes after a troubled few months for Tesla, which has faced a lag in US EV sales and the growing global dominance of Chinese rivals. Company results released today showed that both vehicle deliveries and total revenue fell 9 percent in the first three months of 2024 compared to the same quarter last year. That marks Tesla’s first drop in sales since pandemic-troubled 2020 and its largest fall in revenue year-on-year since the early aughts.

Tesla did not provide details of the affordable vehicles in the works or how much its plans have been pulled forward. But it disclosed in Tuesday’s memo that to accelerate production of new models it will cut back its ambitions for new manufacturing technology.

For years, CEO Elon Musk has touted the company’s path-breaking approach to auto manufacturing. In 2023, he promised that its next generation of vehicles would be produced not by the classic, Henry Ford-ian production line, but by a new, cheaper “unboxed” method that would allow parts to be assembled simultaneously in different parts of a factory. Executives said this new approach would save the automaker labor and production costs.

The new vehicles slated for delivery before mid-2025 will instead be produced on the same manufacturing lines Tesla currently uses, the company said Tuesday, using a combination of new and older engineering methods. That won’t cut manufacturing costs as much as the wider manufacturing revamp, the automaker admitted, “but enables us to prudently grow our vehicle