Tesla Inc (NASDAQ:TSLA). has modified its strategy, opting to introduce "new models" by early 2025 using its existing production capabilities, diverging from its previous plans to develop an entirely new car range priced at $25,000.
Despite the shift, Tesla's announcement boosted its shares in after-hours trading, providing a much-needed lift following a period of declining sales and intensifying competition.
CEO Elon Musk hinted at the upcoming models being more affordable, although he withheld specific details about the vehicles. These models will leverage aspects of Tesla's current and next-generation platforms but may involve less cost reduction than originally planned, hinting at potentially higher prices than the anticipated $25,000.
Reuters on April 5 stated that Tesla had abandoned its plans for the so-called Model 2, which Musk initially denied.
Wall Street viewed the development as reflective of a cautious approach by Tesla, focusing on utilising existing production resources amid uncertain times and avoiding the risks of a "revolutionary" manufacturing overhaul.
Tesla also expressed its intent to continue using the engineering work done for the next-generation affordable car, aiming to implement these advances in the upcoming models.
Additionally, it discussed a "purpose-built robotaxi product," though details and timelines were vague. This announcement is part of Musk's broader vision to transform Tesla into an AI robotics company, with plans for a fleet of autonomous vehicles that would blend aspects of Airbnb and Uber's business models.