by Tesla is Preparing a New Affordable Model Similar to Model Y
During the quarterly investor conference, Elon Musk hinted that the new budget Tesla model might look like a Model Y. This caused a mixed reaction among the brand’s fans: some are disappointed, others are concerned about the company’s strategy. However, if the car is released this year, it could become a very attractive product on the market.
The first half of 2024 was difficult for Tesla: the company recorded its largest revenue decline in the last decade (12%), despite the updated Model Y. The company’s shares fell by more than $30. In response, Tesla promises to focus on a new “affordable model,” which is already being produced in small batches.
Details of the New Model
During the discussion, Musk noted that the new model would be similar to the Model Y. It will likely be a simplified version with fewer features: reduced battery capacity, no screens for rear passengers, fewer cameras, and other elements. Tesla might also use existing Model Y manufacturing technologies to reduce costs.
That would be very disappointing. If it’s just another trim level… why wasn’t it released long ago? A cheaper Model Y by a few thousand dollars won’t change the situation. We need a CyberCab with pedals and a steering wheel
However, not everyone expects this strategy to succeed. Some believe that a simplified Model Y could undermine sales of the regular version, reducing the company’s margins. Others point out that the Model 3 has already lost part of its market share due to the success of the Model Y, and now history may repeat itself.
Will Tesla Manage to Emerge from the Crisis in Time?
Despite the criticism, Tesla has a chance to benefit from launching the new model right now. In the coming years, government support for electric vehicles in the US may decrease, which will complicate sales for all manufacturers. If Tesla can offer an affordable model just during this period, it will help the company overcome its financial difficulties.
For now, it remains unclear how significant the changes in the new model will be. But it is obvious that Tesla is betting on recognizable design and cost reduction, not on radical innovation. Market conditions may play into the company’s hands if it manages to fill the niche of budget electric vehicles before competitors adapt to the new rules.
