Tesla mega bull Ron Baron has just released a bold timeline for the electric vehicle giant’s production of the $25,000 model during an interview with news platform CNBC‘s Squawk Box segment.
Tesla to kickoff $25k EV production within 18 months
According to Baron Capital Chairman and CEO Ron Baron, Tesla will officially commence the production of the highly awaited mass-market electric car within just 18 months. This forecast highly demonstrates the billionaire’s confidence in the Musk-led company.
“Wait ’til you see what’s going to happen when all of a sudden they start selling cars, instead of $40,000 a piece, for $25,000 a piece, which is going to happen in about a year or year-and-a-half.”
Ron Baron, Baron Capital Chairman and CEO
However, Teslarati noted that this timeline is “extremely aggressive” as the Tesla boss recently warned about some production challenges and high-interest rates issues that affect demand.
As EV-a2z previously reported, CEO Musk warned at the Q2 2023 Earnings Call that the Cybertruck’s large-scale production will not be easy due to its complex design. He also emphasized the adverse effect of the increasing interest rates on customer demand.
Tesla targets annual production target of 2 million units
Tesla’s plans to launch a low-cost model with approximately $25,000 price is part of its strategy to expand its customer base. It is crucial for the automaker to hit its set production and sales target of 20 million EVs annually by 2030.
Interestingly, the Tesla investor also implied that the EV giant aims to hit an annual production target of 2 million units for the $25,000 car.
According to previous reports, the planned EV will be a compact or a subcompact car, which are popular segments in Europe and Asia. Some also refer to the upcoming mass-market Tesla EV as the “Model 2.” However, the company has yet to decide and announce the model’s official name.
Challenges
Tesla has been developing the new $25,000 EV since the second quarter when it introduced the next-gen platform.
Therefore, Mr. Barron’s timeline is indeed very ambitious. Even more, the Tesla boss’ previous estimate for the Cybertruck’s volume production was 18 months. It would be challenging for the company to hit the production of the new mass-market model at the same time.
“I would be very disappointed if it took us — and that would be shocking if it took us three years. But 18 months from initial deliveries to have — to reach volume and reach prosperity with an immense — I can’t tell you how much the blood, sweat, and tears level required to achieve. That is just staggering.”
Tesla CEO Elon Musk
Nonetheless, Ron Baron remains optimistic about Tesla and its future endeavors, even saying that the brand “can’t possibly be matched by anyone else.”
“They have data technology. They’ve made cars cheaper than it was when Ford (NYSE: F ) made one of these cars. Our company now makes about eight or $9,000 in profit a car.”
Ron Baron, Baron Capital Chairman and CEO
Tesla’s decision to launch a $25,000 model is crucial for the company to defend its market dominance against Chinese automakers’ cheap offerings. It will also aid the company in expanding its customer base, further boosting its sales and deliveries in the future.
