Tesla reiterates its schedule for an affordable electric vehicle, despite reports suggesting possible delays.

      Christian de Looper / Digital Trends

      Tesla has reaffirmed its intention to commence production of a more affordable electric vehicle in the first half of 2025, sticking to the timeline in spite of conflicting reports and persistent skepticism within the industry. During the recent earnings call, company executives confirmed that all production preparations are finalized and the launch is still set for June.

      This announcement follows a report from Reuters, which cited unnamed sources stating that Tesla's lower-cost EV—internally referred to as “E41”—might be delayed, possibly shifting the timeline to late 2025 or early 2026. The report indicated that Tesla's aim to produce up to a quarter million units of the new model was being re-evaluated, with fluctuating internal goals and no definitive revised launch date.

      In the earnings call, Tesla’s VP of Vehicle Engineering, Lars Moravy, countered that narrative, asserting the company is prepared to begin production on existing assembly lines. “The models released in the upcoming months will closely resemble the current vehicles we produce,” noted Moravy. “The essential aspect is that they will be affordable and available for purchase.” CFO Vaibhav Taneja also reiterated the June production target, asserting that necessary upgrades to accommodate the new models were completed alongside recent modifications to the Model Y lines.

      As highlighted in Digital Trends' recent report, the affordable model—expected to be a simplified version of the Model Y—is anticipated to have a smaller size and a lower price point, likely falling below $40,000 before any incentives. Tesla is reportedly capitalizing on increased local sourcing of components to mitigate potential tariffs and trade fluctuations.

      Nonetheless, Tesla is under growing pressure. The automaker's Q1 2025 earnings revealed a significant 71% drop in income, and global sales have been declining. In California, Tesla's market share fell below 50% for the first time this year. Analysts and market observers continue to attribute part of the waning consumer sentiment to CEO Elon Musk's divisive political involvement.

      For Tesla, the introduction of the affordable EV is not merely a product release—it is a critical test to see if the company can regain traction in a swiftly changing market.

      Nick Godt has reported on global business news across three continents for over 25 years.

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