Tesla said it was on track to roll out new, cheaper electric vehicle (EV) models in the first half of 2025 and would start testing an autonomous ride-hailing service in June, exciting investors and overshadowing quarterly results that fell short of Wall Street expectations.
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The electric car company posted a dip in deliveries last year, raising pressure for it to roll out lower-priced models and the autonomous vehicles and software that CEO Elon Musk has said underpin its financial future.
The company’s shares rose 5 per cent after it said it would cut costs and work on the new vehicles. Musk told analysts and investors on a call that the company would start testing a fully autonomous paid car service in Austin, Texas, in several months.
“Teslas will be in the wild, with no one in them, in June, in Austin,” he said.
Its driver assistance software, known as full self-driving, or FSD, will see unsupervised tests in other states – including California – this year as well, he said. At the same time, Tesla is trying to make cars for less, and it said costs of goods sold had hit their lowest level ever in the fourth quarter, at less than $35,000, driven by lower raw material costs.
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Tesla has a history of delivering products late and the company’s recommitment to delivering the new vehicles in the first half of the year was positive, said Thomas Martin, senior portfolio manager at Tesla shareholder Globalt Investments. He was also encouraged by Tesla’s reduced costs.
“They’ve been able to execute on the cost side and get that down,” he said. “Their ability to do that in the fourth quarter definitely cushioned the blow.” Last year, Tesla abandoned plans to build a cheaper vehicle platform for the mass market – often called the Model 2 – Reuters reported in April.