Tesla begins manufacturing prototypes of an affordable car
Tesla has begun producing prototypes of its long-promised affordable electric car, signaling a strategic move to reverse a sharp decline in global sales and reignite consumer interest.
The announcement comes as the company, led by billionaire CEO Elon Musk, reported its steepest quarterly sales drop in over a decade. Despite missing Wall Street profit expectations, Tesla’s automotive profit margins were slightly better than feared. Following the earnings report, Tesla’s stock dipped 2.6% in after-hours trading.
Tesla stated that mass production of the new budget-friendly model is expected to begin in the second half of this year, raising hopes of a rebound in demand. The company currently faces mounting pressure from lower-cost competitors—especially in China—and growing criticism tied to Musk’s political positions.
“Tesla’s weak performance isn’t unexpected given recent challenges,” said Jacob Born, an analyst at eMarketer. “But a truly affordable model could significantly boost sales if marketed effectively.”.Stay updated on Kuwait’s latest news and job openings by following our WhatsApp channel!https://whatsapp.com/channel/0029VaCkXo25q08jnKrRwo27
This marks the second consecutive quarter of declining revenue for Tesla. In the April–June period, revenue dropped 12% to $22.5 billion, down from $25.5 billion the previous year—despite the release of an updated Model Y, Tesla’s best-selling vehicle. Investors had hoped the refreshed model would lift demand.
Global vehicle deliveries fell 13.5% during the second quarter, coming in below Wall Street forecasts. However, Tesla’s auto gross profit margin, excluding regulatory credits, stood at 14.96%, slightly above expectations, supported in part by lower production costs per vehicle.
With competition intensifying and consumer sentiment shifting, Tesla’s bet on an affordable EV could be a defining moment in its bid to maintain its position in the rapidly evolving electric vehicle market.
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