Tesla is gearing up to finally launch its robotaxi service, but the company is drawing close to another equally important deadline.
As Elon Musk gets set to begin offering robotaxi rides to a select group of invitees in Austin this weekend, Tesla fans are still waiting for news about the company’s long-awaited low-cost electric cars.
In January, Tesla said that it would start production on new models, “including more affordable models,” in the first half of 2025.
In the automaker’s earnings in April, Tesla reiterated this timeline, with Vice President of Vehicle Engineering Lars Moravy saying the company was working through “last-minute issues” on the new cars.
That deadline is fast approaching, and there is little sign that Tesla is gearing up for a major product launch.
The stakes for the EV giant are high. Tesla has seen its sales collapse across the globe so far this year, as it grapples with consumer backlash over CEO Musk’s politics and production disruptions due to a refresh of its best-selling Model Y EV.
Analysts previously told Business Insider that Tesla’s stale product lineup is not helping matters. The carmaker has not launched a new vehicle since the Cybertruck in 2023, and the angular pickup’s sales have been underwhelming.
Even as Tesla’s product lineup has stagnated, its rivals have launched a flurry of new electric models. Much of this competition has come from China, where a brutally competitive EV market has pushed Chinese companies like BYD to launch new models at rock-bottom prices.
Data from industry group EV Volumes found that although Tesla’s Model Y and 3 were still the top-selling electric cars in the world in the first four months of the year, their sales are coming under pressure from BYD’s Seagull and the Wuling Mini, two affordable, compact city cars that sell for the equivalent of less than $10,000 in China.
Fears grow over fundamentals
Some analysts have already begun to sound the alarm bells.
In a note this week, Wells Fargo analysts Colin Langan and Kosta Tasoulis said that Tesla’s business fundamentals were worse than expected, with deliveries failing to recover in the second quarter.
The analysts also warned that the recent Senate ruling to end California’s zero-emission rules would remove the need for automakers to buy regulatory credits from Tesla, which they estimated could cut Tesla’s earnings before tax and interest by as much as 16%.
Langan and Tasoulis said demand for the refreshed Model Y, which Tesla began rolling out earlier this year, “appears weak,” adding that the mysterious affordable models were the only apparent driver of sales in the second half of the year.
Despite their importance, it’s still unclear what the new models hinted at by Tesla will look like.
Tesla has said they will be produced on the same manufacturing lines as its current vehicles and will use aspects of the same platform.
Reuters has reported that the new models will include a stripped-down version of the Model Y, production of which has been delayed by several months, according to anonymous sources.
For now, it seems Musk and Tesla are mostly focused on the 10 or so robotaxis set to launch in Austin, leaving a major question mark over the rest of the company’s product roadmap.
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