Tesla’s affordable EV and robotaxis now in focus after Musk backlash

Wall St has pinned its hopes on a cheaper car, promised by the end of the first half of this year, to revitalise drooping Tesla sales

Mon, 21 Apr, 2025 - 18:12

Tesla investors will be eager to ask CEO Elon Musk two pressing questions when the electric vehicle maker reports results tomorrow: When will the affordable vehicle launch, and is the robotaxi plan on schedule?

Wall St has pinned its hopes on a cheaper car, promised by the end of the first half of this year, to revitalise drooping Tesla sales that have been hit by competition and retaliation to Musk’s far-right politics.

Reuters reported last Friday that plans for an affordable Tesla include a stripped-down version of its best-selling Model Y SUV made in the US, but its production has been delayed by months.

“The low-cost Tesla might be the one thing that could turn momentum around,” said Will Rhind, the CEO of global ETF issuer GraniteShares.

If it ends up just being a bare-bones version of the Model Y, we think the street could be disappointed. Elon really needs to hit the deadline on this and hit the vehicle itself

Tesla needs a win badly. As sales have slumped, so have margins — Wall St estimates the company’s automotive gross margin likely hit its lowest level in the first quarter.

Analysts expect this to persist as Tesla continues to offer incentives to boost sales. The company has said using an existing vehicle platform and production lines to develop a cheaper car will lower its capital costs, but has offered scant details beyond that.

Faced with slowing demand for its ageing line-up and red-hot sales of Chinese EVs in China and Europe, Musk pivoted to robotaxis and artificial intelligence last year. He promised driverless ride-hailing services to the public in Texas by June.

Apart from the fact that Musk has promised and failed to deliver self-driving Teslas for nearly a decade, there are serious concerns about safety and related litigation risks that could come with deploying unproven driverless technology on public streets.