During an earnings call held today, Tesla, led by Elon Musk, announced its commitment to introduce more affordable electric vehicle models in the first half of 2025. Despite experiencing a disappointing financial year in 2024, the electric vehicle leader is determined to achieve a turnaround this year. In addition to the forthcoming electric vehicles, Tesla indicated that it will enhance its Full Self-Driving (FSD) technology. The company also revealed that it has successfully reduced the average manufacturing cost to below $35,000 (approximately ₹30.30 lakh) per vehicle.

In 2024, Tesla experienced a decline in global sales for the first time in over a decade, which adversely affected its profitability. The revenue for the fourth quarter reached $25.707 billion, falling short of Wall Street's expectations of $27.2 billion. Furthermore, the net income for the fourth quarter plummeted by 71 percent to $2.3 billion.

The year 2024 was marked by a decrease in profitability for the electric vehicle manufacturer. The net income for the year dropped to $8.4 billion, representing a 23 percent decline from 2023 and a significant 40 percent decrease from the record profit of $14.1 billion achieved in 2022. Additionally, the company lost its status as the largest manufacturer of pure electric vehicles earlier this year, as BYD surpassed it in total deliveries for 2024.

New year, new models:

Tesla is preparing to release a series of announcements that could significantly impact its financial performance in 2025. The company plans to introduce a range of "more affordable" models in the first half of the year. While Tesla has hinted at this initiative for some time, specific information about these new vehicles remains elusive. There are speculations that these models may be simplified versions of the current Model Y or Model 3 electric vehicles; however, Tesla's official communications appear to contradict this notion.

The electric vehicle manufacturer has indicated that the new models will utilize components from both its next-generation platform and its existing platforms. Furthermore, it has stated that these upcoming electric vehicles will be produced on the same assembly lines as its current offerings. This strategy of utilizing existing parts is anticipated to lower costs, and Tesla asserts that it will facilitate an increase in production volume while minimizing capital expenditures. Nevertheless, the company has acknowledged that the expected decrease in production costs may not be as significant as initially projected, due to challenges associated with integrating new processes with existing technology.

In this context, the new, more affordable models may take the form of the recently speculated Model Q. Although there are very few confirmed details, the pricing is anticipated to be around $30,000 (approximately ₹25.97 lakh), making it more accessible than Tesla's current product range.

Full-Self Driving 2025:

During the recent earnings call, Elon Musk outlined his vision for Full-Self Driving (FSD). The CEO of Tesla announced plans to launch a paid, unsupervised FSD service in Austin, Texas. Musk intends to expand this service to additional cities across the United States by the conclusion of 2025, contingent upon demonstrating the system's safety in Texas. He asserted that various automotive manufacturers have expressed interest in licensing Tesla's FSD technology, although it remains uncertain whether the vehicles utilized in the FSD service will be owned by customers or managed by Tesla. Additionally, there is a lack of information regarding the pricing structure. As with many of Musk's ambitious declarations, it is yet to be determined if these plans will materialize.

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