Tesla Makes Moves To Reclaim Its Place In The EV Market While Toyota Recedes!

The automobile sector has been buzzing with the promise of electric vehicles (EV) and autonomous mobility in the last few years, with growing interest in the technologies.

However, despite its fame, Tesla found itself placed in the second spot as Chinese company BYD took the lead in the electric vehicles (EV) market race.

One of the reasons for this shift was the cost-effective pricing strategies of BYD and other carmakers, which helped them gain market share. Now, in a bid to reclaim its place in the EV market, Tesla has made a new announcement.

So, what is Tesla planning to do? Read on!
 

What Did Tesla Announce?

 

• Tesla plans to start production of its next-generation EVs aimed at a larger market and is being described as a compact crossover, according to four individuals closely associated with the project.

• Codenamed “Redwood”, production is scheduled to begin in the second half of 2025 at the company’s Texas factory, which will be followed by its Mexico factory and eventually one in North America, to be decided later.

• Among the planned new models is an entry-level $25,000 vehicle designed to compete with cheaper EVs like those made by BYD as well as similarly priced internal combustion engine vehicles.

• However, while stating that producing new vehicles would be challenging, Tesla CEO Elon Musk warned that the company could face a slowdown in sales growth this year.

• While the belief is that Tesla could sell 2.2 million vehicles in 2024 (as per Visible Alpha), which would be a 21% increase from 2023, it’s well off from Elon Musk’s long-term target of 50% set around three years ago.

• While Tesla didn’t speak about the target, the company’s shares were down 6% post Musk’s comments.

 

What Did Tesla Say?

 

• In a Q4 and FY 2023 update report, Tesla said, “We are focused on bringing the next generation platform to market as quickly as we can, with the plan to start production at Gigafactory Texas. This platform will revolutionize how vehicles are manufactured.”

• Ahead of this, the report said, “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.”

• [Contd.] “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. In 2024, the growth rate of deployments and revenue in our Energy Storage business should outpace the Automotive business.”

However, industry-leading automaker Toyota has a very different view of the industry. Read on what they had to say!
 

What Did Toyota Say?

 

• Toyota’s Chairman, Akio Toyoda, hasn’t been a big fan of EVs from the start, which is one of the key reasons he bowed down from the title of being the company’s CEO. 

• Toyoda believes that switching to EVs is not the answer and that full EVs would reach a market share of just 30% globally.

• The remaining 70% will be shared among hybrids, hydrogen fuel cell cars and internal combustion engine vehicles powered by petrol and diesel.

• A translated version of Toyoda’s statement reads, “BEVs and FCEVs [fuel cell vehicles] come as a set with infrastructure ... However, one billion people around the world live in areas without electricity. In the case of Toyota, we also supply vehicles to these regions, so a single BEV option cannot provide transportation for everyone.”

Do you think Tesla would be able to regain lost ground with its new cost-effective, next-generation EV models? Do you think Toyota’s chairman has a valid point about the future of the industry?

Let us know in the comments below!