- Will we get news of a more affordable Tesla EV at today's We, Robot event in Los Angeles? That's very unclear.
- But the market is clearly in need of more affordable electric options, even beyond the Model 3 and Model Y.
- CEO Elon Musk could announce news of a cheaper Tesla EV or keep the focus on autonomous ride-hailing vehicles.
There's an old Steve Jobs-ism that I think about a lot as we cover what's next in automotive technology: "People don't know what they want until you show it to them." And as Jobs himself admitted, that's a kind of derivative of something Henry Ford famously said as he sought to democratize the then-new automobile: "If I'd asked customers what they wanted, they would've told me a faster horse."
Though they only apparently met once, Tesla CEO Elon Musk is certainly an admirer of the Apple co-founder—or at least, of his playbook. Today's "We, Robot" Tesla Robotaxi demo at a Hollywood studio in Burbank, California feels like the kind of show Apple would've put on at the peak of its cultural relevance.
But those famous quotes resonate another way, too: we don't really know if people want robotaxis and fully driverless cars yet. They do, however, very clearly want more affordable electric cars. And with any luck, Musk will give the world some long-awaited news on that front.
Put more directly, there is very little evidence right now that people are drawn to purchase certain cars over others because of their automated driving assistance systems. Whether it's General Motors' Super Cruise, Ford's BlueCruise or even Tesla's own Autopilot and Full Self-Driving, people generally check those boxes or get them with a purchase and say "Huh, this is interesting." They don't often seek those cars out because of those features. That's something we hear quite often anecdotally from EV owners and prospective ones.
It's also backed up by data. Research firm AutoPacific’s 2024 Future Attribute Demand Study indicates that autonomous driving aids, to say nothing of full autonomy, don't really drive car purchases: "Despite a growing number of automakers offering hands-off semi-autonomous driving systems for use on highways, they’re not yet among the most demanded features by today’s vehicle shoppers," the study said. "Rather, two simpler and more affordable safety-enhancing automated features have climbed their way into the top 10 most-wanted features list." What people want instead, the study says, is more basic automated features like rain-sensing windshield wipers, cross-traffic alerts and automatic emergency braking.
That may also be because the vast majority of people, driving cars that are on average 13 years old in America, don't have much experience with systems like Super Cruise—to say nothing of full-blown robotaxis. Google's Waymo is objectively the leader in that field at this point, but even those cabs only run in three cities.
Let's put aside the questions of whether Tesla can actually deliver on this technology and pass countless regulatory hurdles after more than a decade of undelivered promises—and admittedly, those are huge things to put aside. When we do, it's clear that Musk is about to sell people on something don't know they want, and betting the farm on the idea that they will when they see it.
But we do know this for certain: people want more affordable electric cars.
The cost of entry is still one of the biggest barriers to going electric. It's true that new car prices have shot up globally since the pandemic, and that EV costs are generally higher still. In August, the average new electric car cost $56,575 before any tax incentives or discounts, according to Cox Automotive.
Now, that's changing fast, especially with a glut of new affordable EV options coming to market in the next few years. There's the next-generation Chevrolet Bolt EUV, which could start around or below $30,000; the Kia EV3; whatever Ford's "skunkworks" program is cooking up; the Jeep Renegade, and a few others.
So where's Tesla in that crowd? We really don't know. Musk has been back and forth on that one. Plans for a more affordable "Model 2"—not an official name by any means—had been in the works for years. That vehicle, built in a new platform, was meant to push Tesla's cars into even more customers by being perhaps the most affordable new EV in the U.S. At one point, production of the affordable model was meant to start at Tesla's Texas factory in the second half of 2025.
But in April, sources within the company told Reuters that Musk put that plan on the back burner to focus on its robotaxis instead. Musk then said Reuters was "lying," but followed up by saying that the next "more affordable" Tesla would not only be built in tandem with the robotaxi but be a mix of old and new platforms. Here's what we reported at the time:
“These new vehicles, including more affordable models, will utilize aspects of the next-generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up,” Tesla’s first-quarter earnings release said.
The company elaborated somewhat in Q2's earnings call release as well in July: “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 able to be produced on the same manufacturing lines as our current vehicle line-up.”
So where that project stands now is unclear. Some have speculated that Tesla will pull a rabbit out of its hat and offer a truly new car that undercuts even the Model 3 and Model Y; others fear that it could be something like either of those with cloth seats. While Tesla has a great deal of its stock price riding on projecting "success" with its robotaxi demo, some analysts also want proof of life for cheaper future cars as well.
“I'm looking for three vehicles (most are expecting two) and I believe we'll only hear production timing on the Model 2, which I expect to begin late in 2025,” wrote one analyst with Deepwater Asset Management, which invests in Tesla. “This timing is a few months later than what Elon's comments suggested on the June earnings call. The one wild card could be [that] the more affordable Model 2 is actually a stripped-down Model 3, which would be viewed as a negative by investors."
It would be a negative for customers as well. Because let's face it: the Tesla brand could use a boost. Between Musk's becoming the most vocal booster of a presidential candidate half the country hates and its own aging lineup, Tesla's market share and public image are shrinking fast. Proving it's still truly in the game of making and selling cars, and not just ceding sales to General Motors and Hyundai, would be a needed boost for the brand and for Musk as well.
Maybe people really don't know what they want until they see it. But Tesla could score a win here by giving people what they do want.
Contact the author: patrick.george@insideevs.com
