Week 31/25 Tesla Update: Affordable Model Y, Discontinuation of Model S & X, Introduction of Mini-Cybertruck, Autopilot Court Decision
Tesla Plans Smaller Electric Pickup and Affordable Model Y to Expand Market Reach
Tesla, the electric vehicle giant, is reportedly considering the development of a smaller electric pickup truck, often referred to as a "baby Cybertruck" or smaller electric pickup. This announcement comes in light of the Cybertruck's commercial underperformance, particularly in global markets beyond North America.
The Cybertruck, with its polarizing design and high prices starting at nearly $70,000 USD, has significantly underperformed against Tesla’s original sales targets. The company currently sells roughly 20,000 units per year, far less than the planned production capacity of 250,000 units annually.
Tesla's Vice President of vehicle engineering, Lars Moravy, has confirmed that they have been exploring designs for a smaller pickup, with a focus on the growing role of Tesla’s robotaxi service, which could use such vehicles for goods delivery as well as passengers. This smaller pickup is seen as a potential way to better address global markets and diversify Tesla's electric vehicle offerings.
In addition to the smaller pickup, Tesla is also working on an affordable, stripped-down version of the Model Y. This more affordable model is a higher priority for the short and medium term, reflecting Tesla’s strategic shift to cater to a broader urban and international market.
The news of Tesla's smaller electric pickup and affordable Model Y comes at a time when the company is navigating a series of legal challenges. In April 2019, a Model S owner near Key Largo, Florida, was involved in a fatal Autopilot crash, for which Tesla has been found partially at fault. The jury in the case established a 33% fault for Tesla, potentially requiring Tesla to pay a $329 million claim. Although Tesla has appealed the ruling, a three-digit million-dollar amount is still probable if Tesla does not win the appeal.
Despite these challenges, Tesla continues to push the boundaries of autonomous driving technology. An autonomous Tesla commercial vehicle could potentially hit the market by 2026. In Austin, Texas, Model Ys are primarily controlled by the FSD software, which was first introduced in a beta version at the end of 2020.
However, Tesla's expansion of its robotaxi service from Austin, Texas, to the Bay Area in California includes a human driver due to the lack of a license for remotely operated vehicles in the region. There are about a dozen similar cases pending in the US, which could be influenced by this ruling as a precedent.
In summary, Tesla is designing and considering a smaller electric pickup truck, partly motivated by the Cybertruck’s commercial underperformance and to complement the robotaxi fleet development. No formal launch or timeline for this smaller pickup has been announced. Tesla is meanwhile prioritizing launching a more affordable, simplified version of its Model Y. These moves reflect Tesla’s strategic shift to diversify their electric vehicle offerings with an eye on broader urban and international markets, as well as autonomous delivery applications.
In light of the Cybertruck's commercial underperformance, Tesla is also developing an affordable, stripped-down version of the Model Y as a higher priority, which aims to cater to a broader urban and international market. Simultaneously, the company is exploring designs for a smaller electric pickup, focusing on this vehicle's potential role in the growing robotaxi service for delivery applications, as well as addressing global markets and diversifying Tesla’s electric vehicle offerings.
