Tesla’s Highly Anticipated $25,000 Car Will Begin Production Next Year. It Is Good For Tesla Stock.
Jan 25, 2024
Tesla, the renowned electric vehicle manufacturer, has been in the limelight for its proposed next-generation platform, which is projected to radically alter the landscape of the automotive industry. This innovative platform, which was unveiled by the company’s CEO Elon Musk at Tesla’s Investor Day in March 2023, is designed to power the production of their eagerly-awaited, next-generation $25,000 vehicle, boosting Tesla stock.
The company’s track record of missed deadlines on new product launches, however, has led to a degree of skepticism among investors regarding the actual launch date of these next-generation vehicles. The most significant delay was experienced in the production of the Cybertruck, which was initially expected to hit the market in 2021 but was postponed until late last year.
Gene Munster from Deepwater Management playfully suggested a formula for decoding Musk’s timelines: “Take whatever time frame he has, and multiply it by two.” A prediction that seems to be corroborated by an anonymous source who disclosed that volume output for the new vehicle might not commence until 2026.
Despite such potential setbacks, industry analysts, including Munster, maintain that the introduction of a $25,000 next-gen EV could potentially double Tesla’s business. Gary Black, Managing Partner of the Future Fund, shares this optimism, positing that a lower-cost, next-gen vehicle could revolutionize Tesla’s stock by allowing it to compete more directly with traditionally more affordable, gas-powered cars. He also noted that such a vehicle could attract a new segment of buyers, expanding Tesla’s consumer base.
However, both Black and Munster acknowledge the risk of hurting demand for existing models, should the new vehicle be announced prematurely. Munster even speculated that the model in question might actually be a $30,000 sub-compact model, expected to be announced in 2025 and released in 2026.
Musk, undeterred by these criticisms, has stated that Tesla is making significant headway in producing the affordable, next-gen vehicle. He went on to describe the next-gen platform as “game-changing,” not revealing specific timelines or volume expectations. He did, however, highlight that the first production line for the vehicle will be situated at Tesla’s gigafactory in Texas, with the second at the planned gigafactory in Mexico. With Tesla’s earnings call looming with the new price of Tesla stock at 207.83, analysts are keenly looking for clearer guidance on potential price cuts and gross margins. The company’s shares, which have more than doubled in 2023 despite a 15% dip this year, saw a slight lift on Wednesday morning. As the world awaits Tesla’s next move, one thing is clear: Tesla’s potential next-gen vehicle could potentially send shockwaves through the auto industry.