Can Elon finally deliver on his promise?

Stop me if you’ve heard this one before.

In its explanation of its fourth-quarter results, the automaker stated that “preparations are underway across our existing factories for the launch of new products in 2025, including more affordable models.”

Not surprisingly, any specific details about any less-expensive Tesla were notable by their absence.

In the company’s earnings report, it stated that “affordability remains top of mind for customers, and we continue to review every aspect of our cost of goods sold.”

Tesla did say that its more affordable model would be a mix of the current platform as well as its next-generation platform. By not using a totally new platform, the automaker can manufacture the new model using existing assembly lines. This saves the automaker money during manufacturing, even if the new model’s development ends up costing more than expected.

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Beyond this model, Tesla’s revised Model Y, dubbed Juniper, should be reaching showrooms shortly, which could boost sales in 2025.

Increasing competition

Still, Tesla needs a less-expensive model, as more affordable options are coming from a number of competitors. The least-expensive Tesla, the Model 3, starts at $42,490 before a $7,500 federal tax credit, according to Tesla’s website.

Yet Tesla CEO Elon Musk remains confident, and looking at the competition, he has reason to remain so.

While there are a number of electrified competitors that cost less than the Tesla Model 3, none come close to offering the Model 3’s EPA-rated 363 miles of range. The only one that does is the $34,995 front-wheel-drive Chevrolet Equinox EV, with an EPA-rated 319 miles of range, although that’s still 44 miles short of Tesla.

Declining sales don’t scare investors

The announcement comes as Tesla sales dropped for the first time in 2024, despite price cuts and cut-rate financing, defying Musk’s predictions last year that sales would grow by as much as 35%. Instead, Tesla sold 1.79 million vehicles worldwide last year, nearly all of them Model 3 and Y.

With $97.7 billion in revenue, Tesla recorded a $7.1 billion net income for 2024. In comparison to full-year 2023 figures, net income fell 53% despite sales that rose by a meager 1%. The company’s car sales dropped 6% to $77.1 billion.

Final thoughts

Yet analysts are thrilled that Tesla announced it would begin unsupervised testing of its autonomous robotaxi service in Austin, Texas, starting in June 2025. The announcement comes despite NHTSA’s multiple investigations of the robotaxi’s underlying self-driving technology.

They are equally thrilled by Tesla’s Optimus humanoid robots, which the company expects to begin manufacturing by the end of the year. The robots will initially be used for manufacturing work, with the aim of producing 10,000. Tesla will not begin selling Optimus robots to other companies until next year.

Given Musk’s attention is diverted by robots and robotaxis, not to mention DOGE, one wonders if the company’s automotive efforts are suffering from benign neglect.