Tesla to launch $30,000 Model Q Car 2025
07:18 Share

This episode is brought to you by Amazon Prime. There's nothing sweeter than bacon cookies during the holidays. With Prime, I get all my ingredients delivered right to my door, fast and free. No last minute store trips needed. And of course, I blast my favorite holiday playlist on Amazon Music. It's the ultimate soundtrack for creating unforgettable memories. From streaming to shopping, it's on Prime. Visit Amazon.com slash Prime to get more out of whatever you're into.

When you check out at the pharmacy, you see the journey from idea to medicine, thanks to our intellectual property system, or IP for short. IP safeguards inventions, like a new way to prevent seizures or lower cholesterol. And IP supports competition from other brands, then lower-cost generics, which are 90% of prescriptions filled in the U.S. Innovation, competition, lower costs, thanks to IP. ♪

Learn more at phrma.org slash IPWorksWonders. Hey, everybody. Welcome back to the Elon Musk podcast. This is a show where we discuss the critical crossroads that shape SpaceX, Tesla, X, The Boring Company, and Neuralink. I'm your host, Will Walden.

What does Tesla's rumored Model Q mean for the electric vehicle market? And could this sub-$30,000 model redefine affordability for EV buyers? And how does the potential launch of a China-specific three-row Model Y factor into Tesla's strategy? These questions take center stage as Tesla's latest investor meeting reveals significant updates about its product roadmap.

Tesla is reportedly gearing up to launch a new affordable vehicle, tentatively referred to as the Model Q, in the first half of 2025. Deutsche Bank analyst following a recent meeting with Tesla's head of investor relations, Travis Axelrod, disclosed the vehicle's projected price: less than $30,000 when including subsidies.

Without US EV tax credits, the price could rise to $37,499. Analyst Edison Yu characterized this move as part of Tesla's strategy to expand its total addressable market, or the TAM, with the Model Q joining a lineup potentially augmented by other innovations, such as a longer wheelbase Model Y variant for China.

The announcement aligns with Tesla's long-term goals of broadening its appeal by diversifying its lineup and targeting underserved market segments. The Model Q would be smaller and lighter than the current Model 3 by approximately 15% and 30%, respectively. Analysts speculate it will serve as an entry-level model with streamlined features to keep costs down while maintaining Tesla's reputation for cutting-edge technology.

Now, in addition to the Model Q, Tesla appears poised to target the Chinese market with a new variation of its Model Y. Rumors suggest this vehicle will feature a three-row configuration and a longer wheelbase, aiming to appeal to families and compete with domestic automakers like BYD. While Tesla China has declined to confirm specifics, the move could address growing competition in a market where affordability and versatility drive consumer preferences.

This potential Model Y variant reflects Tesla's strategy of tailoring its offerings to regional needs. By focusing on China, a crucial EV market, Tesla could enhance its competitiveness while reinforcing its global growth objectives. According to Deutsche Bank, this diversification in product design could be instrumental in boosting Tesla's production and delivery numbers in the coming years.

The revelations from the investor meeting have already influenced financial projections. Deutsche Bank raised Tesla's stock price target from $295 to $370, citing optimism about the Model Q and other forthcoming products. Bank of America also adjusted its outlook after a recent visit to Tesla's Giga Austin factory, reiterating confidence that a sub-$30,000 EV could significantly expand Tesla's TAM.

Investors appear encouraged by Tesla's continued innovation despite concerns about fluctuating demand and potential economic headwinds. And Tesla's stock climbed 3% during midday trading following the news, extending its recent winning streak to five days. Now, analysts predict that a more affordable vehicle could attract a new demographic of buyers, further solidifying Tesla's dominance in the EV sector.

While Tesla's product announcements have generated excitement, challenges still remain. Goldman Sachs recently revised its Q4 delivery estimates downward, citing potential hurdles in achieving year-over-year growth in 2024. Concerns about demand have also been amplified by reports of temporary worker furloughs at Tesla's Cybertruck production line.

Now, despite these issues, Tesla remains a confident outlook. During the investor meeting, the company projected value growth of 25% to 30% for next year, emphasizing its ability to maximize production capacity at existing factories. Such growth could hinge on a successful rollout of the Model Q and other new vehicles, which aim to attract a broader customer base without compromising profitability.

Tesla's ambitions extend beyond traditional EVs, though. The company is making strides in autonomous driving technology, which is a topic that dominated much of the investor meeting discussion. Tesla's full self-driving software is undergoing significant updates, with version 13 reportedly demonstrating a 3-5x performance improvement compared to its predecessor. Analysts expect this iteration to reduce human interventions to just over 1 per 10,000 miles.

Tesla's Robotaxi initiative is also a focal point. The company plans to launch testing in California and Texas next year using teleoperators for added safety during the initial phase. This fleet will consist of company-owned vehicles, reflecting Tesla's cautious approach to scaling autonomous services.

Now, regulatory hurdles are a thing. One potential barrier to Tesla's autonomous ambitions is the regulatory environment. However, you noted that Tesla anticipates changes under the incoming U.S. administration, which could streamline federal guidelines for self-driving technology through the National Highway Traffic Safety Administration, or the NHTSA. And such regulatory shifts could pave the way for faster deployment of robo-taxi services, both domestically and internationally.

The company's optimism contrasts with its history of setting ambitious goals that have sometimes fallen short. Yet analysts believe Tesla's current plans, backed by advancements in FSD technology and anticipated regulatory support, stand a strong chance of fruition.

The Model Q's projected affordability signals Tesla's intent to dominate the budget-friendly sector of the EV market. Competing directly with models like the BYD Dolphin and Volkswagen ID.3, this vehicle could redefine customer expectations for cost-effective electric mobility. And by leveraging economics of scale and simplifying features, Tesla aims to make EV ownership accessible to a much broader audience. At the same time,

Tesla's exploration of specialized models like the three-row Model Y for China shows that they're building for certain environments. The adaptability may prove crucial as the global EV market becomes increasingly competitive.

Adelassian.

Just beautiful.

Whatever you love, find it on eBay. eBay. Things people love.

Hey, thank you so much for listening today. I really do appreciate your support. If you could take a second and hit this subscribe or the follow button on whatever podcast platform that you're listening on right now, I greatly appreciate it. It helps out the show tremendously and you'll never miss an episode. And each episode is about 10 minutes or less to get you caught up quickly. And please, if you want to support the show even more, go to patreon.com slash stage zero.

And please take care of yourselves and each other. And I'll see you tomorrow.