Tesla New Budget Model To Be Launched Soon for Asian Market

• Published On: 3 October 2023
• 100 Views

Tesla's largest manufacturing plant and key export base, the Shanghai gigafactory, currently ships to Malaysia and will shortly begin shipping to Singapore and Thailand.

With its cutting-edge "new-gen platform," which aims to introduce more affordable compact and subcompact electric vehicles (EV) that have the potential to drive significant volumes across developing Southeast Asian markets, Elon Musk's Tesla, an American automaker, is focusing on new opportunities in Asia to make Tesla an EV platform as well.

Tesla is developing its next-generation EV platform at various locations, according to its Q2 investor deck. Industry insiders claimed that the Tesla new budget model, which is anticipated to cost roughly $25,000, may be released by the end of 2023, despite the fact that some experts anticipate a 2025 launch.

Currently shipping to Thailand and Singapore, Tesla's Shanghai gigafactory, its major export base and largest manufacturing facility, will shortly begin exporting to Malaysia.

However, China's BYD, which has a stronghold in Malaysia's developing EV industry and has surpassed Japanese EV producers in this region, presents Tesla with fierce competition in these regions.

Tesla's market access comes via exporting because the region's low volume makes it impractical to build integrated gigafactories there. Additionally, the Models 3 and Y gigafactory in Shanghai, which has a capacity of 750,000 units, has space to send vehicles to nearby markets.

In a research published on July 19, Barclays stated that it anticipated that Tesla's next inexpensive EV would account for 275,000 deliveries in 2026 and eventually surpass the Model Y, the company's current volume driver, in terms of sales, reaching 3.5 million units annually by 2030.

This is true even though sales of the Model Y are predicted to reach 1.5 million units and those of the Model 3 to reach 990,000 units.

With factories in the US, China, and Germany (Berlin), Tesla can produce 2.025 million vehicles annually.

The company's greatest production base, which consists of two facilities in Austin (250,000 units) and Fremont (650,000 units), is in the United States, despite the fact that its largest unit in Shanghai produces 750,000 units.

“Tesla is well-positioned in the developed world, including North America, Europe, Japan, Korea, Australia and China, but it is not competitive in the developing markets, where income levels are lower, and Tesla’s current prices are not competitive there. In Southeast Asia, Latin America and the Middle East, Tesla isn’t competitive against Chinese brands’ starting offer in EVs in these regions. A $25,000 Tesla in India could be interesting, but what would be affordable is an even smaller price tag. Today, EVs in the developed world are facing price issues. Even if Tesla comes up with a $25,000 EV in India, it won’t shake up the market as the Indian consumer’s affordability is far less than that," said Felipe Munoz, global automotive analyst, JATO, said in an interview.

Tesla delivered 466,140 units in April through June, an increase of 83% from the same period last year, of which the Model 3 entry-level sedan and the Model Y mid-SUV accounted for 446,915 units. In a world of inflation, Tesla is lowering costs throughout its spectrum in an effort to draw buyers.

According to Tesla's Q2 shareholder deck, "our operating income decreased slightly year over year to $2.4 billion in Q2, resulting in a 9.6% operating margin," and that this was because of a lower average selling price as a result of price decreases.

The firm JPMorgan expects Tesla to concentrate more on boosting sales in "more mainstream price categories".

BYD is facing difficulty in India as a result of the border conflict between Indian and Chinese soldiers in the Galwan Valley in 2020, which resulted in stiffer limitations on foreign direct investment from neighbors sharing land boundaries. Due to increased scrutiny as a result, the Centre must first approve any investment proposals coming from these nations. Even though growth projections for other markets are dubious, Tesla is taking advantage of this chance to restart negotiations with India.

Tesla is considering constructing a factory here, despite the fact that the difficulties are still present from prior attempts. As general elections draw near, the government is pressuring the company to commit firmly to its production plan for India. Government incentives similar to Tesla's production-linked incentive program may be provided.

"Musk has set an ambitious aim of selling 20 million electric vehicles worldwide by 2030. A person with knowledge of Tesla's India operating plans stated that the company must establish manufacturing capacity and tap demand in some of the largest markets in the world, with India playing a significant role.

However, Indonesia and Malaysia are also considering providing incentives to Tesla in exchange for the company establishing local production facilities. Tesla’s Asian market news has shaken the entire industry.