tesla It expects to start production of its next-generation electric vehicle at its Texas factory in the second half of 2025, its CEO said Wednesday. Elon Musk.
Its screening followed a Reuters story earlier saying that Tesla had told suppliers to prepare for a June 2025 launch of a smaller crossover vehicle aimed at a mass market.
“We currently expect to begin production in the second half of next year,” Musk told analysts in a post-earnings call, adding that the model was very advanced in product development.
The new model will be produced first in Texas, followed by Mexico, he said, noting that ramping up production of the new vehicle will be a challenge.
The electric vehicle maker on Wednesday pointed to “markedly lower” sales growth this year as it focuses on the long-awaited launch of the next generation of the vehicle.
The company also reported a drop in gross margin in the fourth quarter from the same period a year earlier as it cut prices and offered incentives to boost demand for its electric vehicles, and its shares fell 4.7% in post-closing operations.
The company also warned of a sharp slowdown in volume growth this year compared to last.
“In 2024, our vehicle volume growth rate may be markedly lower than the growth rate achieved in 2023, as our teams work on launching the next generation of vehicles at the Texas gigafactory,” the company said in a statement.
The company posted a gross margin of 17.6% in the three months ended in December, up from 23.8% a year earlier and ahead of analysts’ average estimate of 18.3%, according to LSEG data. In the third quarter, Tesla posted a gross margin of 17.9%.
The quarter’s record deliveries also squeezed margins, as price cuts and costs associated with ramping up production of the new Cybertruck offset lower raw material costs for batteries.
“Today’s flat sales and substantially reduced margin results are further evidence that Tesla is losing its leadership advantage and that its brand leadership has weakened,” said Greg Silverman, global head of brand economics at Interbrand. .
MORE PRICE CUTS?
Tesla cut prices throughout last year. It reduced the price of the Model Y, its most popular vehicle, by up to 26.5% in the United States.
“I don’t think the price cuts are over, mainly for the reason that demand for their electric vehicles remains weak,” said Investing.com analyst Jesse Cohen, who called the quarter disappointing.
The company reached its delivery goal of 1.8 million cars by 2023, despite the fact that its CEO, Elon Musk, warned of a blow to demand due to high interest rates. However, Tesla lost its position as the number one electric vehicle manufacturer by sales to China’s BYD in the fourth quarter.
Tesla’s fourth-quarter revenue rose 3% to $25.17 billion, its slowest pace of growth in more than three years. The average analyst expected $25.62 billion, according to LSEG data.
I’m a recent graduate of the University of Missouri with a degree in journalism. I started working as a news reporter for 24 Hours World about two years ago, and I’ve been writing articles ever since. My main focus is automotive news, but I’ve also written about politics, lifestyle, and entertainment.