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Tesla Accelerates Cheaper Electric Car Production

You get a Tesla! You get a Tesla! And you get a Tesla! Tesla has plans in the works to make Tesla vehicles more affordable in hopes to be the leader in electric vehicles world wide, getting ahead of Chinese competition.

Written by

Carmen Rosái

Last Updated

April 24, 2024

Tesla Shifts Gears to Accelerate Cheaper Electric Car Production

Tesla, the powerhouse in electric vehicle innovation, is shifting strategies to fast-track the arrival of new, more affordable electric cars as soon as the end of this year or early 2025. In a strategic pivot from earlier plans, which focused on developing a radically new vehicle platform, Tesla is now blending cutting-edge and existing technologies to speed up production and slash costs.

Speedy Rollout Amid Competitive Pressure

In response to the growing competition, particularly from cost-effective Chinese EV manufacturers, Tesla is putting the pedal to the metal to introduce more budget-friendly models into its lineup. This rapid deployment is designed to keep Tesla at the forefront of the electric vehicle market without sacrificing quality or innovation.

Hybrid Production Approach

To achieve this accelerated rollout, Tesla is adopting a hybrid production approach. The upcoming vehicles will be manufactured using both the innovative next-generation platform and the proven platforms underpinning current models like the Model 3 and Model Y. This strategy allows Tesla to leverage its existing production lines, saving costs and potentially boosting production efficiency.

Utilising Current Production Capacity

Before investing in new manufacturing facilities, Tesla plans to maximise its existing production capacity, which is nearing three million vehicles annually. By pushing its current resources to the limit, Tesla aims to maintain cost efficiency and manage financial risks during these uncertain economic times.

Traditional Manufacturing for New Models

Although Tesla initially planned to introduce a new manufacturing process called "unboxed" manufacturing for assembling vehicles in a radically different way, this method will now be reserved for future projects like the robotaxi. The upcoming affordable models will be produced using traditional manufacturing techniques to ensure reliability and meet the accelerated production schedule.

Robotaxi: The Future of Ride-Sharing

Alongside these more affordable models, Tesla is continuing its development of the autonomous robotaxi, set to be revealed on 8 August. This futuristic vehicle, which will operate without a steering wheel or pedals, embodies Tesla's vision for the next generation of ride-sharing, employing the innovative manufacturing methods originally planned.

Market Enthusiasm and Financial Implications

The announcement of Tesla's accelerated plans was met with enthusiasm in the financial markets, where Tesla's share price surged by 11% in after-hours trading. This response underscores the market's confidence in Tesla's strategy to navigate the competitive pressures of the EV industry effectively.

Global Market Implications

Tesla's streamlined production process might also hasten the introduction of these new models to international markets like Australia. Typically, new Tesla models take about two years to reach Australian shores, but by utilising existing production lines also used for models currently sold in Australia, this timeframe could be significantly reduced.

Leveraging Technological Advancements

Tesla is not abandoning the technological innovations developed for its next-generation platform. Instead, these advancements, including improved powertrains, battery technology, and manufacturing automation, will be integrated into the new, more affordable models. This strategy ensures that Tesla's investment in innovation continues to enhance its product offerings.

Pricing Strategies in Flux

While Tesla previously hinted at a potential $25,000 USD price point for these entry-level models, the actual pricing remains uncertain amidst the strategic shifts. However, Tesla continues its efforts to reduce production costs and make its vehicles more affordable, reflecting its commitment to making sustainable transportation accessible to a broader audience.

In summary, Tesla is adapting its approach to better compete in the fast-paced EV market, focusing on cost-effective production techniques and strategic resource utilisation. This move reflects Tesla's agility in responding to market dynamics and its dedication to democratising electric vehicle technology.

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Electric and Hybrid Cars

Carmen Rosái

June 17, 2025

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