Week of May 25th: Disappointing Fourth Quarter Results for Tesla, Affordable Electric Vehicle Coming by July, Focus on Optimus, AfD Changes
Tesla, the electric vehicle (EV) giant, is gearing up for a significant shift in its production line in the coming months. The updated Model Y will be produced in all four global factories from February 2025, leading to several weeks of production downtime in Q1. This move is part of Tesla's strategy to introduce a more affordable electric vehicle (EV) variant of the Model Y SUV, aiming for about 20% lower production costs and targeting broader accessibility without compromising core EV features.
Elon Musk, Tesla's CEO, confirmed that this new model is essentially “just a Model Y” made cheaper to produce, addressing affordability challenges for customers. The first builds of this new model were produced in June 2025, with volume production planned for the second half of 2025, likely launching in Q4 2025.
Regarding Tesla's humanoid robot, Optimus, there were no recent updates in the provided search results about its production or development status. However, it is expected that the first version of Optimus will serve as the basis for the second and will be offered to external customers for the first time as early as the second half of 2026.
Tesla's financial performance in Q4 2024 saw some challenges. The earnings per share were $0.73, falling short of analysts' expectations. Additionally, the revenue for the same quarter was approximately $25.7 billion, also falling short of expectations. The margin in the auto business, excluding CO2 credit sales, fell to 13.6% in Q4 2024, the lowest in five years.
Despite these challenges, Tesla is pushing forward with ambitious plans. Musk sees much more potential in autonomous driving than just in the electric vehicle business. In June 2025, Tesla launched a paid, driverless robotaxi service in the US city of Austin, with plans to expand to several other US cities by the end of the year. Musk also stated that Optimus is even more important for Tesla than its Full Self-Driving (FSD) technology.
Tesla is also preparing a production line for 1,000 units per month of Optimus, with plans for lines producing 10,000 and 100,000 units. The company's goal is to ramp up Optimus production faster than any other product in the past.
As for the workforce, Tesla had around 126,000 employees at the end of 2024, about 10% less than a year earlier. The company is expected to introduce a new Tesla in a more compact format in the first half of 2025, aiming to further expand its EV offerings.
The range of Tesla's electric vehicles is expected to grow further in 2025, with the company addressing the current limitation of available battery capacity by weighing between using it for EVs or the energy business.
In Europe, Tesla's sales may be affected by CEO Elon Musk's political activities. Musk has been supporting the AfD in Germany, causing controversy and potentially impacting Tesla's sales in the region.
In summary, Tesla's current focus is on ramping up production of an affordable Model Y variant in late 2025, with no fresh public details on the Optimus humanoid robot as of August 2025. The company is also pushing forward with its autonomous driving and robotics initiatives, aiming to revolutionise the transportation industry. However, challenges in the financial performance and workforce numbers indicate that Tesla still has hurdles to overcome in the coming months.
The new affordable model of the Model Y SUV, set to launch in Q4 2025, is a significant part of Tesla's strategy to broaden accessibility to electric vehicles (EV), and it is being produced at a lower cost of about 20% compared to the original model. Despite Tesla's financial challenges in Q4 2024, the company is pushing forward with ambitious plans, including its autonomous driving and robotics initiatives, such as the development of Optimus, a humanoid robot, and a paid, driverless robotaxi service.
