and moreInvestors have been unhappy with Tesla's performance for years, arguing that the company needs to update its product line to maintain growth amid slowing demand for electric vehicles. Tesla recently revealed to Wall Street that the company is facing challenges between two waves of growth, so the pace of growth is likely to slow this year. And the next generation of vehicles will be the key to the second wave of growth.
Seth Goldstein, an analyst at Morningstar, said in an interview: "Tesla needs to launch a car that is the most accessible to the people in order to expand the product line and continue to maintain the rapid growth in deliveries. He believes that Tesla has achieved good results in the luxury and entry-level luxury car markets, but is not competitive in the low-end car market.
Tesla's stock price has been driven recently** due to uncertainty over 2024 results and concerns about the impact on profit margins from EV demand and Tesla's price cuts. Tesla's stock price is up 27% year-to-date, compared to 4% over the past 12 months, while the S&P 500 is up nearly 4% and 20%, respectively, over the same period.
Here are four things to know about Tesla's next-generation electric vehicle, commonly known as the Model 2:
Selling price: There is no official word on how much the car will cost, but it is expected that the new car will cost around $25,000 and must remain below $30,000. The less expensive Model 3 version starts at around $39,000, while the all-wheel-drive, longer-range version is closer to $50,000.
Time to market and location of production: Tesla revealed in its fourth-quarter earnings report that it expects to start production of next-generation vehicles in the second half of 2025. The new car will initially be produced in Texas, and in the future a plant in Mexico may become a second production site. However, some analysts are skeptical of this timeline, believing that high-volume** may not begin until later in 2026.
What is the next generation platform? : Tesla confirmed at its "Secret Big Plan Chapter 3" analyst event in March this year that it is developing a next-generation platform, but the specifics are unclear. Some Wall Street analysts believe Tesla has provided too few details about the next generation of cars and its finances. During the recent earnings conference, Musk did not provide details about the next generation of cars, but he said that Tesla will adopt a revolutionary manufacturing system that will make it one of the most advanced car manufacturing systems in the world.