Tesla Inc. didn’t placed on a splashy product show at its highly anticipated Investor Day earlier this month.
There have been no fresh details about its upcoming Cybertruck, no news on updates to the Model 3 sedan or Model Y crossover and no sneak peek at a coming mainstream model that is expected to kick off an enormous growth cycle.
As an alternative, CEO Elon Musk said there are more pressing challenges for the EV maker’s long-term growth — namely, reinventing the manufacturing process to make reasonably priced Teslas financially possible.
Tesla is developing a plan to chop its manufacturing cost in half.
“The need for people to own a Tesla is incredibly high,” Musk said on the event, held at the corporate’s factory in Austin, Texas. “The limiting factor is their ability to pay for a Tesla.”
As a part of the automaker’s “master plan” for Earth’s transition to sustainable energy, Musk and top executives presented a blueprint for Tesla’s future as a global manufacturing powerhouse, starting with a recent factory in northern Mexico.
The last word goal is for global sales of 20 million vehicles a 12 months in a decade’s time, a stratospheric number compared with Tesla’s 2022 deliveries of 1.3 million luxury cars and crossovers, with a mean selling price of around $65,000 (all figures in USD).
Financial analysts predict an inexpensive Tesla, which has been informally called the Model 2, to have a starting sticker price of $25,000 to $30,000 and compete with popular gasoline cars just like the Toyota Corolla.
Musk said this week that the brand new model will operate mostly as an autonomous vehicle, but he didn’t explain when that may occur. No Tesla vehicle is currently able to autonomous driving.
Analysts aren’t only skeptical about Tesla’s ability to provide self-driving cars anytime soon, in addition they query the automaker’s optimistic sales goal and its ability to take care of high margins because it scales to a much larger player within the industry.
Bernstein analysts said in a research note after Investor Day that Tesla’s deep January price cuts suggest it’s already facing pressure from the competition.
“Tesla is unlikely to ramp up recent models fast enough to fulfill volume expectations of two.4 million in 2024, especially for the reason that next-gen platform appears to still be within the design phase,” Bernstein wrote. “Furthermore, we imagine that price cuts underscore the highly competitive nature of the auto market, where sustained high margins and high volume is unprecedented.”
Tesla executives, however, say they’ve an in depth plan to transition to a high-volume, low-cost manufacturer.
“If we’re going to scale the best way we would like to do, we now have to rethink manufacturing again,” said Lars Moravy, Tesla’s vp of auto engineering. “As a part of the master plan, we now have to make a step change in cost.”