Latest news with #lowcostEV
Globe and Mail
6 days ago
- Automotive
- Globe and Mail
Tesla's Low-Cost EV in Focus as Global Sales Decline
Electric vehicle (EV) maker Tesla (TSLA) is drawing attention with its proposed low-cost EV, as global sales of its autos continue to decline. Last year, CEO Elon Musk already canceled plans for a $25,000 EV, called Model 2. However, the company has since been promoting ideas of launching a more 'affordable' EV this year to beat the competition and expand its market share. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter This year, Tesla's auto sales in China were ousted by domestic player BYD (BYDDF). Moreover, Musk's political inclinations sparked dramatic protests and criticism, which ultimately led to weakening sales of Tesla's EVs globally, especially in European markets. The History of Tesla's Low-Cost EV When a Reuters report dated April 5, 2024, claimed that Musk had canceled the $25,000 EV project, Musk immediately commented on his X account saying 'Reuters is lying.' His response took investors by surprise, leaving many wondering why he was disputing widely known facts. Frantic investors questioned whether Musk had changed his mind, but Musk confirmed that the project was indeed dead. The new affordable EV was expected to be launched in the first half of 2025, but no specific details have been released yet. The only known information is that Tesla plans to produce stripped-down versions of Model 3 and Model Y, which will be 'affordable' and consumers would be able to buy them. Since the second half of last year, Musk's attention has been divided between his political activities, including his role in leading the infamous DOGE (Department of Government Efficiency) committee and running his business ventures. Tesla faced massive criticism for the CEO's involvement in laying off government staff, which also hurt the company's sales. However, Musk announced last week that he is leaving his role as advisor to the U.S. President Donald Trump and will now refocus his full attention on his companies. Musk's Pay Deal Hangs in the Balance Musk's non-business endeavors have also cost him financially. In 2024, he was the lowest paid CEO among the S&P 500 companies, receiving zero salary from his Tesla. Since 2018, his compensation is tied to Tesla's overall performance and depends on meeting specific milestones related to market capitalization, revenue, and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization). He has several stock options that are contingent on achieving these milestones. However, due to the company's dwindling performance, some executives are considering awarding Musk a traditional CEO salary. It remains to be seen whether Musk's full-time return will lead to a full-throttle boost in Tesla's performance. Is Tesla a Buy, Hold, or Sell? On TipRanks, TSLA stock has a Hold consensus rating based on 16 Buys, 10 Holds, and 11 Sell ratings. Also, the average Tesla price target of $282.70 implies 17.5% downside potential from current levels. Year-to-date, TSLA stock has lost 15.1%. See more TSLA analyst ratings
Auto Blog
23-05-2025
- Automotive
- Auto Blog
Tesla is Delaying its Much-Hyped, Low-Cost Model Y
The car Tesla keeps promising it will deliver is still not ready for delivery, and hasn't even entered production. Delays are commonplace with Tesla When CEO Elon Musk took over at Tesla all those years ago, the game plan was simple: build six-figure electric vehicles to help fund low-cost EVs for the masses in a few years. The Roadster, Model S, and Model X did bring us the Model Y and Model 3, but we've still not seen the 'everyman' EV Tesla promised us. Now it seems we never will, as news that a simplified version of the Model Y – the vehicle many believed was the mythical low-cost EV – has been delayed yet again. Reuters reports that the vehicle, codenamed E41, was set to begin production and sales in the United States in the first half of this year, with a global production expansion to China and Europe later this year or possibly in 2026. The report notes that Tesla plans to build 250,000 low-cost vehicles in 2026, but there are no details on when production might occur or if those plans were solidified internally. For now, it's safer to assume Tesla will again balk. Tesla Model Y Juniper — Source: Tesla The low-cost EV that never was When Tesla unveiled new battery technology in 2020, Musk claimed the company would produce a $25,000 vehicle by the end of that year. Nearly five years later, we're still without a low-cost EV. At some point, Musk's thinking changed on the low-cost EV. In late 2024, he said it was now 'completely at odds with what we believe.' When it first began taking pre-orders for the Model 3, Tesla said it would soon build a low-cost version for the United States market. To its credit, Tesla offers a low-cost, stripped-down Model 3 in Mexico that lacks features like the second-row screen and ambient lighting, and uses fabric instead of vegan leather for its seats. 2024 Tesla Model 3 Performance — Source: Tesla Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Reuters also reports that the E41 is still set to launch in China in 2026, though it's not known when exactly Tesla plans to begin selling the car there. The low-cost E41 is said to be 'smaller' than the existing Model Y and costs up to 20 percent less to produce. Sources also claim that E41 will be accompanied by a low-cost Model 3. It's not clear if the variant for sale in Mexico will simply be rolling out elsewhere globally or if other markets will see a uniquely new low-end Model 3. It's worth noting that details about range and charging for these two incoming vehicles are conspicuously missing. Expect a middling range and average charging speed; lithium is the easiest place to reduce the cost of an EV. What about Cybercab and Model 2? Tesla Cybercab Prototype — Source: Tesla A separate report from The Information details how the fates of the Robotaxi (or Cybercab, whatever you prefer) and Model 2 were intertwined. The Cybercab is Tesla's fully automated ridesharing vehicle, while the Model 2 was a smaller, stripped-down sibling to the Model 3. Both vehicles were said to be essentially the same car; one drove you, and you drove the other. The report claims that, according to Tesla's calculations, the Cybercab would actually lose the company money because it wouldn't be able to achieve the needed market saturation. The model was set to sell for $25,000, and Tesla would gain additional revenue by taking a cut of the fares people paid to be shuttled around town. It's essentially the Uber or Lyft business model without drivers. Internal reports allegedly stated that ride income would be slow and that launching the service outside the United States would be nearly impossible due to regulatory hurdles. In the wake of this report, Musk apparently decided to kill the Model 2 in favor of the E41 and greenlight the Cybercab. Neither vehicle has seen production lines. Final thoughts Tesla's Q1 2025 earnings show a company in steep decline. Many analysts believe Musk's efforts within the U.S. government have disillusioned Tesla's target market, and a complete rebound may take a long time if it's even possible. It's ironic; the best time for a low-cost EV from Tesla is now, but Musk might have tarnished the brand so much that the vehicle won't really make a difference in the bottom line.
