Tesla’s next growth wave won’t come until late 2025 when the automaker launches a low-cost vehicle on a next-generation platform, starting at its factory in Texas and later moving to a future plant in Mexico, CEO Elon Musk said on the company’s fourth-quarter earnings call last week.
“There’s a lot to look forward to in 2024,” Musk said on the earnings call. “Tesla is currently between two major growth waves.
“We’re focused on making sure our next growth wave — driven by the next-gen vehicle, energy storage, full self-driving and other projects — is executed as well as possible,” he said.
Tesla’s new vehicle will be geared toward entry-level segments that the Model 3 sedan and Model Y crossover, which drove the company’s most recent growth wave, can’t reach in terms of price. Tesla has not said what the price might be for the car, but analysts estimate it will be in the $25,000-$30,000 range.
“We’re very far along on our next-generation, low-cost vehicle,” Musk said. “This is going to be profound, not just in the design of the vehicle itself, but in the design of the manufacturing system.”
The vehicle will launch out of Texas so Tesla engineers can be close to the assembly line, he said.
Musk hedged his bets on the timing of the launch, saying his late 2025 timeline was optimistic. He didn’t discuss additional vehicles expected from the new platform, including a fully autonomous robotaxi.
“Our current schedule says we will start production towards the end of 2025,” Musk said. Once the new manufacturing techniques are perfected, Tesla will move forward with other locations, he added. The first would be at a site Tesla has secured in northern Mexico and a third location will be outside of North America.
Regarding its current lineup of vehicles, including the recently launched Cybertruck pickup, Tesla executives on the call didn’t forecast a sales goal for 2024. Tesla delivered 1.8 million vehicles globally last year, and Wall Street analysts are forecasting 2 million to 2.2 million this year, as EV adoption slows industrywide.
Musk also touched on a controversy over comments he made on social media last week.
Musk said on X, the social media platform he owns, that he would be uncomfortable developing new artificial intelligence projects at Tesla without greater control over the company. Musk said he would want control of 25 percent of voting shares to develop the projects at Tesla rather than outside the company.
Musk, who has about 13 percent of Tesla stock, said he’s not looking for “additional economics” by seeking double the number of voting shares. “I just want to be an effective steward of very powerful technology,” he said.
A dual-class stock structure, which Tesla does not have, would give him that level of control to move forward with AI projects, Musk said.
In its fourth-quarter earnings report, Tesla warned of lower sales growth this year after slashing prices over the course of 2023, cutting the automaker’s profitability.
Tesla’s first growth wave was driven by the Model 3 sedan in 2017 and the Model Y crossover in 2020. But the Austin, Texas, automaker recently lost the title of the world’s biggest EV seller to China’s BYD, which has more affordable models and outsold Tesla in pure-EVs in the fourth quarter.
“In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next-generation vehicle at Gigafactory Texas,” Tesla said in a statement.
In its fourth-quarter financial statement, Tesla said net income slipped 39 percent to $2.5 billion while total revenue inched 3 percent higher to $25.2 billion.
Gross margin shrank from a year earlier as it cut prices and offered incentives to boost demand for its electric vehicles.
Operating income fell 47 percent to $2.1 billion, but the company remained bullish about its financial position.
“Free cash flow remained strong in 2023 at $4.4 billion, even as we focused on future growth projects with our highest capital expenditures and R&D expenses in company history,” Tesla said in the statement.
The company reported a gross margin of 17.6 percent for the three months ended December, compared with 23.8 percent a year earlier, and analysts’ average estimate of 18.3 percent, according to LSEG data. In the third quarter, Tesla posted a gross margin of 17.9 percent.
Reuters contributed to this report.