Tesla’s cheaper new car might revive sales but squeeze profit

THE PROFITABILITY OF Tesla’s so-called affordable new cars will be in focus when the EV-maker reports quarterly results on Wednesday, and analysts think that thousands of dollars in cost cuts per vehicle will not be quite enough to protect profit margins.

- ABHIRUP ROY & AKASH SRIRAM

The Standard Model Y and Model 3, introduced earlier this month, represent a bet by Elon Musk that Tesla can increase overall sales and earnings by driving volume, even if each vehicle itself is less profitable. The billionaire CEO has prioritised robotaxis in Tesla's future but must keep sales up while the new machines are developed.

The Model Y and Model 3 are priced $5,000 to $5,500 lower than predecessors in the US. Cutting battery size, offering a less powerful motor, removing rear touchscreens and myriad other current details have saved thousands of dollars.