"Mass Production of 1 Million Low-Cost Tesla Vehicles Will Take 2 More Years"

Wall Street Analyst Visits Tesla Factory

U.S. electric vehicle company Tesla is expected to begin mass production of its low-cost model only in 2027, according to an analysis. The original expectation was 2026, but it has been delayed.

Bloomberg reported on the 11th (local time) that Evercore analysts, a Wall Street investment advisory firm, visited Tesla's Texas factory and revealed this.

[Image source=Yonhap News]

The team led by analyst Chris McNally stated in their report that the best-case scenario for Tesla's low-cost electric vehicle, called 'Model 2,' might be limited to 500,000 units in 2026, adding, "Tesla is increasingly becoming a '2027 story.'"

Initially, Wall Street expected Tesla to produce over 1 million units of Model 2 in 2026. Tesla CEO Elon Musk had said, "Tesla is between two major waves of growth," with the Model 3 sedan and Model Y crossover supporting the first wave, and the next-generation low-cost model representing the second wave. After the earnings announcement on January 24, during the conference call, he mentioned that they were "very advanced in developing the next-generation low-cost vehicle" and planned to start production at the Texas factory in the second half of next year.

However, Evercore analysts believe it will take more than two years for Tesla to mass-produce over 1 million units annually of the low-cost model.

They also noted that the bill of materials cost for the next-generation low-cost model is expected to decrease from $28,000 (approximately 36.79 million KRW) to $20,000 (approximately 26.28 million KRW), and the driving range is expected to be about 250 miles (402 km).

Evercore projects Tesla will supply about 2.7 million vehicles in 2026. Bloomberg explained that this implies earnings per share estimates for that year are 18-20% lower than consensus.