Tesla has unveiled a preview image of its upcoming electric car, which is anticipated to be the entry-level ‘Model 2’ hatchback. This new vehicle will directly compete with the forthcoming Renault 5 and Volkswagen ID 2. During the 2023 shareholder meeting, CEO Elon Musk confirmed that Tesla is working on two new products, likely referring to the hatchback and the rumored refresh of the Tesla Model 3. Musk also revealed that these two cars will have a combined production volume exceeding five million units annually, indicating Tesla’s strategic shift towards becoming a high-volume electric vehicle manufacturer.
This announcement follows Tesla’s recent decision to cancel right-hand-drive versions of the premium Model S and Model X, citing the complexities associated with their conversion. In contrast, the production and sales of the mainstream Model 3 and Model Y have seen significant scaling. Last year alone, Tesla manufactured 1,298,434 Model 3s and Model Ys, while the number of Model S and Model X units produced stood at just 71,177.
At the Investor Day in March, Tesla outlined plans to enhance the efficiency of its factories and vehicles through new production processes and technical innovations. These advancements are expected to revolutionize Tesla’s operations and contribute to a cleaner global economy in the post-internal combustion engine era. Musk emphasized that transitioning to an electrified economy would lead to reduced mining requirements compared to the current economic model, without necessitating austerity measures.
Musk also emphasized the need for a substantial increase in battery production and storage capacity, estimating that Tesla would ultimately require 240TWh of storage. He expressed his belief that as battery energy density improves, all forms of transportation will eventually shift to electric power. Musk dismissed the potential of alternative fuel types, particularly hydrogen, to revolutionize the mobility industry, comparing driving a non-autonomous gasoline car in the future to using a horse or a flip phone.
While it was expected that the shareholder meeting would shed light on the long-awaited Cybertruck and Roadster EVs, as well as future production facilities, Tesla’s focus was more centered on its vision for a sustainable Earth rather than showcasing future products. Consequently, investors reacted negatively to the lack of significant product announcements, causing a 5% decline in Tesla’s value overnight.
Tesla’s engineering boss, Lars Moravy, discussed the company’s “unboxed” production process, highlighting the challenges faced during the Model 3’s initial production phase. However, new methods of vehicle production, pioneered during the development of the Cybertruck, are expected to reduce factory footprint by 40%, cut costs by up to 50%, and minimize the risk of production delays. Tesla aims to streamline the production process by minimizing unnecessary work and avoiding excessive movement or disassembly of components during assembly. These changes are estimated to lower the construction cost per vehicle by approximately $1000 (£830).
Regarding Tesla’s next car, specific details remain undisclosed. However, engineering boss Lars Moravy confirmed that it would not be a Model Y, as depicted in an illustration during Investor Day. Design boss Franz von Holzhausen stated that further information about the new car would be disclosed at a later date, and it is likely to be the first Tesla vehicle produced at the new factory in Monterrey, Mexico. The introduction of the new platform is expected to significantly reduce the construction cost per vehicle, translating into a more affordable price for consumers.
During Investor Day, it was confirmed that the long-delayed Cybertruck pick-up will enter production later this year. The Cybertruck, originally slated for a 2021 launch, garnered significant attention with 200,000 pre-orders by November 2019. However, there was no mention of the Roadster, which has experienced multiple delays. Musk expressed hope for completing the engineering and design of the next-generation Roadster in 2023, with production potentially beginning the following year.
Tesla’s advancements in motor technology have resulted in a 75% reduction in silicon carbide, and the next-generation Tesla motor will no longer utilize any rare earth metals. These improvements contribute to increased efficiency and cleaner operations for Tesla’s vehicles.
