Electric vehicle giant Tesla warned investors that it may suffer from “notably lower” sales growth this year due to the ongoing development of the next-gen platform, which will underpin the brand’s upcoming lower-cost models.
Tesla’s forecast
Tesla informed its investors during the recent Q4 2023 Earnings Shareholder Deck that it expects notably lower sales growth this year compared to last year.
This guidance is primarily influenced by Tesla’s ongoing development of the promised next-generation platform for an imminent market launch. However, it could result in a near-term slowdown in sales.
“Our company is currently between two major growth waves: the first one began with the global expansion of the Model 3/Y platform, and the next one we believe will be initiated by the global expansion of the next-generation vehicle platform.
In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next-generation vehicle at Gigafactory Texas.”
Tesla said in its Q4 Earnings Report
Interestingly, the announcement occurred after Tesla reported strong sales in 2023, owing to its major price cuts to the popular Model 3 and Y.
Purpose of the next-gen platform
Tesla’s next-gen platform is expected to support a mass-market electric vehicle, way cheaper than the brand’s current model offerings.
As EV-a2z previously reported, Tesla aims to produce a new model that costs as low as $25,000
A recent report from Reuters also revealed Chief Executive Elon Musk’s plans to launch the highly-awaited model, codenamed “Redwood” in 2025.
Tesla is in dire need of a model for the mass-market segment, considering the growing competition in the electric vehicle market. For instance, BYD managed to beat the American pioneer in Q4 2023 with its affordable China-made models.
It will also play a significant role in the company’s long-term goals as it has not yet released a new model to join its aging portfolio.
All that said, offering a new and more affordable electric car is crucial for Tesla to advance as the largest automaker in the world. A lower price range could open a bigger customer pool and generate greater volume to support Tesla’s sales goals. Although it could potentially result in lower sales growth and profit margins, launching a lower-cost model will undoubtedly be worth the risk.
