Billionaire Elon Musk-led Tesla plans to accelerate the launch of new affordable models to early next year as the electric carmaker looks to ramp up its product portfolio.

"We've updated our future vehicle line-up to accelerate the launch of new models ahead, previously mentioned start of production in the second half of 2025, so we expect it to be more like early 2025, if not late this year," Tesla CEO Musk says during the company's first quarter earnings call.

Musk says production of cheaper electric vehicles will happen on the existing production lines and is not contingent on any new factory.

"These new vehicles, including more affordable models, will use aspects of the next-generation platform as well as aspects of our current platforms, and will be able to produce on the same manufacturing lines as our current vehicle line-up. So it's not contingent on any new factory or massive new production line. It'll be made on our current production lines much more efficiently," Musk says, adding that this should allow Tesla to get to over 3 million vehicles of capacity when realised to the full extent.

The world's largest EV maker's revenue dropped 9% year-on-year to $21.3 billion due to reduced average selling price of vehicles, the Model 3 update in the Fremont, California factory and disruptions at the Berlin gigafactory. Net income dropped 55% to $1.13 billion from $2.51 billion a year ago.

Tesla reported an 8.5% year-on-year drop in sales in the first quarter as demand for EVs took a backseat. Tesla delivered 386,810 vehicles in the quarter ended March.

The drop in volumes comes when the EV adoption rate globally is under pressure and a lot of other auto manufacturers are pulling back on EVs and pursuing plug-in hybrids instead.

“We believe this is not the right strategy and electric vehicles will ultimately dominate the market,” says Musk.

Tesla, which accounts for 51% of EV sales in the U.S., is betting big on its full self-drive (FSD) mode. The carmaker slashed the price of FSD software by a third to $8,000.

“The way to think of Tesla is almost entirely in terms of solving autonomy and being able to turn on that autonomy for a gigantic fleet. And I think it might be the biggest asset value appreciation in history when that day happens when you can do unsupervised full self-driving,” says Musk.

He also urged investors to try the FSD Version 12. “If you value Tesla as just like an auto company, you just have to – fundamentally, it's just the wrong framework,” says Musk.

The Tesla CEO also believes the world is headed towards autonomous vehicles. “And I'll go back to something I said several years ago that in the future, gasoline cars that are not autonomous will be like riding a horse and using a flip phone. And that will become very obvious in hindsight,” he says.

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