In Difficulty, Tesla Promises More Affordable Cars by 2025

Criticized for the aging of its range and poor sales performances in 2024, Tesla has promised new products in 2025.

The economic press is harsh this morning of July 24, 2024. Our partner Zone Bourse headlines for example “Tesla and LVMH are failing” the day after the presentation of their semi-annual results for the first part of 2024. In the case of the American manufacturer, sales are indeed declining, and the “Tesla magic” seems to have faded.

The reality is rather simple: the electric car market at nearly 40,000 euros is already saturated, and its renewal will now take years. Before the Covid pandemic, the average price of a car in the world was below 30,000 dollars (around 28,000 euros). Today, Tesla is at a turning point in its history: maintain its semi-premium status and accept its already respectable production volume of 2 million cars per year, or grow by opening up from the bottom, with more affordable vehicles.

However, the observation is simple: the high-end market is not waiting for Tesla. Very wealthy customers no longer want a brand that makes the big leap between “popular” and “exclusivity”. From eccentric, Tesla has become ordinary. Meanwhile, high-spending drivers want to continue to dream… and to make their neighbors envious. Porsche, Mercedes, Jaguar, and soon Lamborghini and Ferrari will rebel.

Finally, the car at 25,000 euros?

The financial markets have thus reminded Tesla of reality, the idea of the Robotaxi with an uncertain business model does not seem to be the answer to the urgency of the moment. Also, during his press conference on Tuesday, July 23, 2024, Elon Musk promised that new models would arrive in the catalog as early as 2025.

What should we understand from this? From now on, there will be a refresh (not a new generation!) of the Model Y on the same theme as the Model 3 at the end of 2023. A major aesthetic and technological facelift that will reinvigorate the lineup, but may not suffice. Because the problem of purchasing power will remain the same.

« The projects for new vehicles, including more affordable models, remain on track for production to start in the first half of 2025. These vehicles will utilize aspects of the next-generation platform as well as aspects of our current platforms and can be produced on the same production lines as our current range of vehicles. »

The opening towards utilities?

The risk exposure for Tesla is too great with a two-legged stool that are the Model Y and Model 3. The Model S and Model X are completely failing, while the Cybertruck remains a product that is still confidential and never meant to become a mass product.

Thus, the anticipation for the 25,000 euro car is significant. Elon Musk dismissed the idea of its arrival before 2026. In his statement, is he referring to a “reveal” in mid-2025 and a commercialization in 2026? It’s all a matter of semantics.

But behind the scenes, there are rumors of a new kind of “necessary” product to boost the company’s results: an electric van! Similar to Rivian, for example, which provides Amazon, for instance. It would be ironic if Tesla started to copy its fiercest rival founded by former employees…

After all, a utility vehicle could make sense: there is already a Semi tractor for hauling freight trailers…

Tesla is facing significant challenges. Just like its rocket SpaceX, Elon Musk must now successfully ignite new Tesla stages as his brand ascends. Otherwise, it will be a mid-air explosion.

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