By Hyunjoo Jin and Akash Sriram
(Reuters) – Tesla (NASDAQ:) said on Tuesday it would introduce “new models” before the second half of next year, sending shares up nearly 9% in after-hours trading.
Tesla’s talk of new vehicles, which it said would include “more affordable models,” lifted investor confidence in the EV maker as it struggles with fierce competition as well as cooling demand.
The automaker offered few details on the new products but said they would arrive before the second half of 2025. That was the target set in January by Chief Executive Elon Musk for the launch of a widely anticipated next-generation affordable car, often called the Model 2. Reuters exclusively reported on April 5 that Tesla had scrapped plans for the car, which investors had expected to cost $25,000 and to drive Tesla’s growth into a mass-market automaker.
The unidentified new models referenced by Tesla on Tuesday appeared to be different products. The automaker did not identify a price target.
The models would be built on its current manufacturing lines and use “aspects” of its current platform and a next-generation platform. It cautioned that this plan may “result in achieving less cost reduction than previously expected.”
It also mentioned a “purpose-built robotaxi product” that it planned to build with a “revolutionary” manufacturing process, without offering a timeline for its release. The April 5 Reuters story reported that Tesla planned to continue developing a self-driving robotaxi on the same platform it had been developing for Model 2.
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The automaker said its plan for new models would let it better control capital expenditures during “uncertain times.”
Tesla’s talk of more affordable cars pleased investors despite its weak quarterly results after the bell.
“It looks like the worst was already priced in and there is hope of some pivot to boost sales again,” Mahoney Asset Management chief Ken Mahoney said.
Global growth in demand for EVs has eased, with sales expanding at lower-than-expected rates due to reductions in government subsidies and high interest rates.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” Tesla said.
Tesla’s revenue fell in the first quarter as it handed over fewer electric vehicles to customers due to slowing demand and intense competition worldwide.
The company on Tuesday reported revenue of $21.3 billion for the three months ended March, compared with $23.33 billion a year earlier. Analysts on average had estimated $22.15 billion, according to LSEG data.
The world’s most valuable automaker last recorded a fall in revenue in the second quarter of 2020, when the COVID-19 pandemic hampered production and deliveries.
Net profit in the first quarter stood at $1.13 billion, compared with $2.51 billion, a year earlier.