Tesla (TSLA.O) is expected to unveil on Tuesday a more affordable version of its best-selling Model Y SUV, as the electric vehicle maker seeks to reverse falling sales and waning market share amid rising global competition.
Chief Executive Elon Musk for years has promised mass market vehicles, though last year he canceled plans to build an all-new $25,000 EV, Reuters first reported. The car expected this week is an “affordable” vehicle based on current manufacturing and design platforms.
Tesla posted two clips on X over the weekend, igniting excitement among Tesla fans. One video shows headlights peering out of the dark and another shows what looks like a wheel spinning for a few seconds, followed by “10/7”, the US format for the date October 7.
Neither Tesla nor influencers have indicated that an in-person event is in the works, in contrast to previous major Tesla launches. Still, analysts, investors and fans expect the company to make some kind of announcement.
Major questions include the car’s price, driving range and efforts to strip down costs. Late last year, Musk said the vehicle would be priced below the “key threshold” of $30,000 including US EV tax credits.
In the United States, prices effectively rose by $7,500 at the end of last month, when the credit ended. That helped goose quarterly sales to a record, but expectations are that they will slow down for the rest of the year, unless the affordable car comes to the rescue.
“The desire to buy the car is very high. (It’s) just (that) people don’t have enough money in the bank account to buy it,” Musk said in July during Tesla’s second-quarter earnings call. “So the more affordable we can make the car, the better.”
Musk initially promised that production of the vehicle would start by the end of June. But Tesla only made what it called “first builds” of the car, it said in July, adding that it would be available for customers sometime in the last three months of the year.
Tesla has already been grappling with slowing sales of its aging lineup as competition has grown rapidly, especially in China and Europe, where Musk’s far-right political views also have undermined brand loyalty.
Earlier this year, Tesla launched a refreshed version of the Model Y with improvements including new light bars and a rear touchscreen.
Musk has been pivoting the company toward artificial intelligence, focusing on robotaxis and humanoid robots. Tesla has said it will launch more affordable vehicles in its lineup but has not provided details. Sources have told Reuters the EV maker also plans to roll out a stripped down version of its Model 3 midsize sedan.
Affordable cars will also be key to Tesla delivering 20 million vehicles over the next decade – one of the several operational and valuation milestones set by the company’s board as part of its proposed $1 pay package for Musk.
