Musk unveils plans for low production cost while skirting affordable car option

Tesla will cut assembly costs by half in future generations of cars, engineers told investors on Wednesday, but Elon Musk did not unveil a much-awaited small, affordable electric vehicle.

The automaker has only four models, all priced toward the higher end of the market. The Cybertruck pickup is coming this year, executives said.

Tesla outperformed the industry in recent years, increasing deliveries rapidly despite the pandemic and supply-chain disruptions.

But Tesla cut prices in recent months to boost sales, which were pressured by a weak economy and growing threats from rivals in the United States and China.

The plans for a more affordable car could draw the broadest interest. In 2020, Musk unveiled a plan to develop batteries in-house, which he said would make self-driving electric cars priced at $25,000 feasible by 2023, but Tesla has been struggling to scale up the production of the so-called 4680 batteries.

Executives on Wednesday said Tesla plans to start production of battery materials factories this year, with a lithium refinery and a cathode facility in Texas. They did not give an update to its production volume of 4,680 cells.

Some investors, including those concerned Musk is spending too much time at his latest major acquisition, Twitter, are also hoping he will address calls to buy back shares, which are at about half of their November 2021 peaks even after a rebound of more than 60% this year.