Tesla announced a drop in profits in 2024 yesterday but promised “more affordable models” are on the way in 2025.
The New York Times reports, “The company, which is led by Elon Musk, said it made a profit of $2.3 billion during the last three months of 2024. That was a decline compared with $7.9 billion a year earlier,” but 2023’s figure was boosted by a one-time tax benefit of nearly $6 billion.
Tesla saw an annual sales drop worldwide for the first time in 2024 as more competitors introduced electric vehicles (EVs). China’s BYD overtook the company as the world’s largest EV builder.
Americans bought a record number of EVs in 2024, but Tesla’s market share in the U.S. has fallen below 50%.
Future Products Uncertain
On an earnings call, Tesla Chief Financial Officer Vaibhav Taneja told reporters, “We are still on track to launch a more affordable model in the first half of 2025 and will continue to expand our lineup from there.”
In a letter explaining fourth quarter results, the company added, “Preparations are underway across our existing factories for the launch of new products in 2025, including more affordable models.”
However, no company executives offered any specifics on planned less-expensive vehicles. Last year, Musk canceled a long-planned Model 2, which the company at one point aimed to sell for roughly $25,000.
May Be a More Affordable Model 3 or Y
When an automaker develops a new product, the automotive press typically knows it’s coming years in advance. We learn from company financial statements, press releases, and rumors leaking out of design facilities and models spotted testing at company proving grounds.
No media outlet has reported any new affordable Tesla models in development. The company’s only current projects include a robotaxi and similar large-capacity autonomous van that, if successful, will be operated by the company and not sold as private cars, and a long-delayed low-volume sports car with a quarter-million-dollar price tag.
However, the affordable models executives mentioned could be less expensive than existing cars.
Last month, investment analysts from Deutsche Bank speculated that Tesla was developing what analysts called a “Model Q.” Not an entirely new car, it may be a Model 3 or Model Y with a low-cost, lower-mileage lithium-ion phosphate battery.
Musk, meanwhile, told investors yesterday that the company’s future profits hinge more on its robotics projects and attempts to build self-driving software than on future cars.
He predicted that Tesla will have robotaxis operating in multiple U.S. cities by the end of 2025. Autonomous taxis have proven a difficult challenge for many rivals, with General Motors accepting a loss to end its Cruise robotaxi project last year.