Instead of expensive EVs, Elon Musk’s new Master Plan for Tesla was supposed to bring out budget-friendly models.
Cheap electric vehicles are in high demand, but Tesla isn’t quite there yet.
The electric vehicle firm led by Elon Musk had an Investor Day in Texas, and it included everything but inexpensive electric vehicles.
It’s a huge oversight for a business already facing increasing competition and unpredictable consumer demand.
Fans of Tesla have had a tumultuous few months, so they can’t be blamed for wanting CEO Elon Musk to take a break from Twitter posting to give them news on a long-awaited affordable EV vehicle.
Instead, this week’s investor gathering in Texas yielded disappointing results.
On Wednesday, Musk and several other executives from Tesla gave a presentation at the company’s gigafactory, where they were expected to highlight a more reasonably priced version of the company’s already popular electric vehicles to prove that they meant business when it came to delivering such vehicles.
The presentation of Tesla’s third stage of its Master Plan was supposed to be a big deal, but instead it devolved into a boring four hours of talk about Tesla’s vanity projects like the Cybertruck and heat pumps and autopilot crash statistics and engine improvements.
Although these specifics add a certain amount of mystery to the situation, they do little to hide the fact that Musk has yet to achieve his holy grail of affordable electric vehicles, which would position Tesla as the frontrunner in the worldwide transition to clean-energy transportation.
In fact, the billionaire’s pledges to create a reasonably priced automobile date back nearly 17 years, to when he originally unveiled his Master Plan. He needs one immediately, as his rivals are also working feverishly to develop affordable EVs.
It’s strange that there isn’t a low-cost electric vehicle available.
Meeting consumer demand for a low-cost clean energy vehicle and expectations from Wall Street to speed up production can both be alleviated if Tesla is successful with its “next-generation platform” of affordable EVs.
On the consumer side, Musk has announced his intention to lower the price of Tesla vehicles, making affordable electric vehicles (EVs) more widely accessible and hastening the clean energy transition. From an investor’s perspective, the company’s ability to produce affordable EVs has helped to establish Tesla as a global phenomenon.
Having a Tesla is a highly sought-after goal by many. They can’t buy a Tesla because they can’t afford one,” he remarked. A inexpensive electric vehicle was apparently left out of what was supposed to be a demonstration of Tesla’s products.
Considering the current economic climate, with its high interest rates and inflation, this is especially true. Although S&P expects a 36% increase in EV sales in 2022, the high cost of Tesla vehicles may dampen consumer enthusiasm. The base pricing of Tesla’s Model 3 vehicle is still $43,000.
Tesla’s stock plunged 5% on Wednesday in after-hours trade, prompting investors to moan in unison. Moreover, on Thursday normal trade in New York saw a decline of almost 6%.
Even though Tesla reduced the price of some of its top models by 20% in the United States and Europe last month, it would benefit from introducing a brand new model with a low starting price in order to compete with the traditional automakers who are attempting to bring cheaper alternatives to market.
The cheapest EVs will determine the winner in the EV market.
Musk’s right-hand man at Tesla, Tom Zhu, just claimed that the company had produced 4 million cars, with development speeding up along the way: Production time for the final million Teslas was only seven months, whereas the first million took 12 years to complete. Expenses can be reduced more as growth continues.
Yet, a new, affordable EV model would likely be required to reach a production goal of 20 million vehicles per year by 2030.
In order to produce the $150 billion to $175 billion in investment needed to fulfill this production objective, Tesla CFO Zach Kirkhorn stated Tesla will enhance efficiency through cost cutting. By confirming a new gigafactory in Mexico on Wednesday, Tesla has very probably set up shop to do so.
Yet, time is running out for Tesla, and the lack of a cheap car will only hamper sales as rivals enter the market. The electric vehicle manufacturer, which once had a market valuation of over $1 trillion, is valued like a rocketing tech business due to huge hopes for game-changing innovations. (Its stock price dropped by more than 35% over the past year, reducing its market valuation to roughly $600 billion.)
The goal is to demonstrate how commonplace iPhones have become, and it needs a low-priced vehicle to accomplish so.
Until then, Tesla should focus on the essentials.