Tesla’s chief financial officer Vaibhav Taneja said on Wednesday that the production ramp-up of the long-anticipated affordable EV model will proceed “slower than initially expected.”
The CFO pointed to added complexity in launching a new product and the company’s near-term focus on maximizing US deliveries before tax incentives expire by the end of September.
“We started the production of the lower-cost model as planned in the first half of ’25,” Taneja said during the second-quarter earnings call.
“However, given our focus on building and delivering as many vehicles as possible in the U.S. before the EV credit expires, and the additional complexity of ramping a new product, the ramp will happen next quarter slower than initially expected.”
The company confirmed in its quarterly shareholder presentation that volume production of the new model is now scheduled for later in the year.
“We continue to expand our vehicle offering, including first builds of a more affordable model in June, with volume production planned for the second half of 2025,” Tesla said.
Last week, Barclays analyst Dan Levy said he believes Tesla may “delay the launch of the low-cost model to the fourth quarter, which could be perceived negatively” by investors.
Taneja acknowledged that the revised production timeline would weigh on total revenue, even as interest in the new lineup is growing.
“It will nonetheless impact our total revenue,” he said. “The entire lineup is updated globally. We are seeing an increase in the number of test drives.”
Tesla also noted progress on other key programs, stating that development of its Semi truck and Cybercab robotaxi vehicle is ongoing. “Both [are] slated for volume production in 2026,” the company said in the deck.
Separately, Taneja flagged new pressures on Tesla’s energy storage business stemming from US policy and tariffs.
“Most notably [this is] on the residential storage business, due to the early expiration of consumer credits by the end of this year,” he said. “The challenges of the storage business, therefore, remain both from the bill and from tariffs.”
Despite the near-term headwinds, Tesla continued to invest in AI infrastructure, including compensation for technical talent and computing infrastructure. “Our operating expenses, especially R&D-related spend, will continue to grow,” Taneja said.
“We believe, even in the current environment, it is the right strategy to keep making investments in these areas, to position us for the long term.”
Tesla reported second-quarter earnings on Wednesday. Cantor Fitzgerald said in a new research note that the results beat the firm’s estimates on both revenue and earnings per share but missed on free cash flow.
