Development of Tesla’s smallest electric vehicle is back on – and CEO Elon Musk predicts it could cost half as much to manufacture as a Model 3 sedan, and outsell all other Tesla models combined.
Tesla has reportedly resumed development of its smallest electric car yet, with promises from CEO Elon Musk of a lower price and ambitious sales goals.
Tesla CEO Elon Musk told investors and media last week engineers are working again on the smaller car – the company’s second passenger-car platform, after the Model S/X siblings, and Model 3/Y duo – now production of the Semi has begun, and the Cybertruck is on course for mid next year.
“We don’t want to talk exactly [launch] dates, but this [new model] is the primary focus of our new vehicle development team,” said Musk.
“At this point, we’ve done the engineering for Cybertruck and for Semi, so obviously guess what we’re working on, the next-generation vehicle, which will be probably about half the cost of [the Model] 3/Y platforms. It will be smaller, to be fair.
“But it will, I think … certainly exceed the production of all our other vehicles combined,” Musk claimed.
If Elon Musk’s prediction comes to fruition, the small Tesla could become one of the world’s best-selling cars, irrespective of manufacturer – as the best-selling vehicle globally in 2021, the Toyota RAV4, reported more than 1.1 million sales (according to Car industry analysis).
Tesla has delivered 908,573 vehicles so far this year (to the end of September), and is on track to near 1.3 million vehicles by the end of year, at current production levels. Last year, it delivered 936,000 cars.
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Prices for the Model 3 in the US start from $US46,990 ($AU75,000) – halving which would be in line with Musk’s promises in late 2020 of a $US25,000 base price for the small car.
However, the CEO’s comments appear to refer only to production cost, and do not account for Tesla’s profit margins, which from July to September 2022 sat at 27.9 per cent gross for Tesla car sales – compared to about 14 per cent for other car companies, according to Forbes.
In addition to “making two cars for the amount of effort we currently take to make one Model 3”, according to Musk, Tesla chief financial officer Zach Kirkhorn said the new car would incorporate “everything we learned from [Model] S, X, 3, Y, Cybertruck and Semi”.
A launch date was not given for the small Tesla car, however with the next 18 months set to be occupied by the launches of the Semi truck, Cybertruck ute and possibly the Roadster sports car, it may not arrive until the middle of the decade.
Tesla typically previews future vehicles years before they are due to begin deliveries – either with a concept, such as the 2019 Cybertruck or 2016 Model 3, or a near-production car, such as the 2019 Model Y.
Deliveries have historically begun between 12 months (Model Y) and six years (Roadster, assuming no further delays) after these cars were first shown.
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