Elon Musk's Tesla to launch new models ahead of planned timeline, shares soar

The promise of fresh vehicle offerings, including "more affordable models" utilising existing production lines, has instilled renewed optimism among investors in the EV giant. Tesla has faced formidable competition and declining sales, leading to quarterly results that fell short of Wall Street's expectations.

During a conference call with investors, Chief Executive Elon Musk unveiled plans for the production of these new models, slated to commence in early 2025, potentially even by the end of this year. Previously, Musk had targeted the second half of 2025 for the launch of the highly anticipated next-generation affordable car, colloquially known as the Model 2.

These forthcoming models are set to be manufactured on Tesla's existing production lines, incorporating elements of both its current platform and a next-generation platform. Nonetheless, Tesla cautioned that this strategy might yield less cost reduction than previously anticipated.

Furthermore, Tesla teased a "purpose-built robotaxi product" to be developed through a "revolutionary" manufacturing process, although no specific timeline was provided for its release. Notably, this aligns with the April 5 Reuters report, which outlined Tesla's ongoing efforts in developing a self-driving robotaxi using the same platform earmarked for the Model 2.

Tesla justified its strategy for introducing new models as a means to exercise better control over capital expenditures amid uncertain market conditions. When pressed by analysts regarding the nature of these new vehicles, Musk remained tight-lipped, indicating that the company had divulged all it intended to on the matter.

Musk seized the opportunity during the call to outline ambitious plans for diversifying Tesla's business beyond automotive, envisioning forays into artificial intelligence, humanoid robots, and operating a vast fleet of autonomous vehicles. He asserted that Tesla should be perceived as an "AI robotics company" rather than merely an automaker.

However, Tesla's pivot towards more affordable cars was met with enthusiasm from investors, despite lacklustre quarterly results. Nonetheless, some remained cautious, citing Tesla's history of delays in product rollouts.

The decision to pump the brakes on new capacity mirrors similar moves by other automakers in the US, including General Motors and Ford Motor, in response to slowing EV demand and intensifying competition, particularly from Chinese EV manufacturers.

Despite its weak quarterly performance, Tesla's stock rebounded significantly, adding nearly $50 billion to its market capitalisation and partially reversing a steep decline observed earlier in 2024. Tesla reported a decline in quarterly revenue for the first time since 2020, attributed to repeated price cuts, with net profit also taking a hit compared to the previous year.