Last Updated on: 16th July 2025, 02:42 am

In Tesla’s 1st quarter shareholder letter, the company wrote: “Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025. These vehicles will utilize aspects of the next generation platform as well as aspects of our current platforms and will be produced on the same manufacturing lines as our current vehicle lineup.” Amidst hype around Tesla’s robotaxi pilot program inching forward in Texas, that’s largely been forgotten. But where are those affordable models?

Also, more importantly, are these models going to be make-or-break models for the company in the 2020s?

Tesla sales were supposed to be slightly positive in 2024, according to Elon Musk in 2024, but they ended up being down from 2023. Tesla sales in 2025 are supposed to rise by 30% over 2024, according to Elon Musk in mid to late 2024, but they were significantly down in the first half of this year. A new Tesla Model Y was launched in Q1 2025, and it was supposed to give a big boost to Tesla sales in Q2 and onward, but Tesla sales were again down significantly year over year. So, without a massive breakthrough in Full Self Driving that stimulates a dramatic increase in consumer demand, it seems that the company really needs some new models in order to juice sales.

So, where are those more affordable models?

On the 1st quarter conference call for investors in April, Lars Moravy, VP of vehicle engineering, added:

“We’re still planning to release models this year. As with all launches, we’re working through, like, the last-minute issues that pop up…. At this point, I would say that the ramp might be a little slower than we had hoped initially, just kind of given the turmoil that exists in the industry right now, but there’s nothing blocking us from starting production within the timeline laid out.”

Seemingly, Trump’s tariff war has delayed these models. Perhaps it’s made the supply chain for the models untenable. Perhaps overall costs have just risen so much that Tesla’s price targets for the models wouldn’t be profitable.

However, there are other risks as well. Tesla’s gross margins have dropped a lot from their peak, and the company wouldn’t have even been profitable in the 1st quarter if it wasn’t for regulatory credits (some of which President Trump is now trying to remove). If Tesla launches more affordable models, they need to be able to add to profits ASAP, and they also need to not eat into existing model demand too much. If people buy these more affordable models who would have otherwise bought a Model Y or Model 3 with higher gross margin, that hurts the company. So, Tesla needs to be very careful with this vehicle model development and launch of the new models. The company needs to make sure they grow the customer base, not cannibalize other Tesla sales.

Overall, though, if you assume sales of Tesla’s current models have peaked (as the past two years seem to show), it could be the case that the company’s future depends on these coming models. With slowly dwindling auto sales, Tesla could easily shift from profits to losses, which will hurt the company in several ways. Continuing on as trends have, who knows, Tesla could even be facing bankruptcy in a few years. Unlikely, but possible. Either way, it looks like Tesla needs these new high-volume models in order to truly revive sales growth. So, where are they?

I assume the models will be launched in the second half of 2025, but who even knows? If they are launched, though, will they really be good enough deals and high enough sellers to save this decade for Tesla? Will they save Tesla from a slow but deadly decline? Who knows? Stay tuned to find out. We really need to see the pricing, specs, and features of these new models to come to any kind of objective guess … but we have no idea when we’ll actually see the launch of those models.