Tesla suspends plans for compact electric vehicles aimed at European buyers

BERLIN — Tesla CEO Elon Musk said the automaker has halted work on a compact electric car for the time being, which previous reports said was being developed for the European market.

“We’re not currently working on a $25,000 car,” Musk said during the company’s fourth-quarter earnings call Jan. 26. “At some point we will. But we have enough on our plate right now – too much on our plate frankly,” Musk said.

Media had said Tesla planned to launch the Model 2 as its smallest car and it would be built at the company’s nearing completion factory in Gruenheide, outside Berlin, Germany.

Musk told analysts on the earnings call that Tesla will focus its efforts this year on expanding capacity at current factories in California and China and starting production at its new factories in Austin, Texas. and in Gruenheide.

He said the automaker would not launch any new models in 2022, pushing back the launch of its Cybertruck electric pickup until next year.

“It is important to start the Austin and Berlin ramp to ensure that we are ready once the limitations ease, which will allow us to increase total production more quickly in the future,” a- he declared.

“We started production in Texas and Berlin – we started this last quarter. But that’s not the most important thing. We’re more focused on when we get to volume production and when we can deliver the cars to customers,” Musk said.

Tesla is currently carrying out pre-production tests at the Gruenheide plant pending final approval from local authorities. Musk said he would visit the factory in mid-February. Bureaucratic hurdles and an ongoing lawsuit over the plant’s water usage delayed the facility’s opening for months.

Sales of Tesla’s European vehicles rose 72% to 168,613 last year, according to market researcher JATO Dynamics.

The Model 3 was the automaker’s best-selling car in Europe with 140,421 sales, up 63% year-on-year, making it Europe’s best-selling all-electric car. Tesla began importing the Model Y to Europe from China in July and sold 27,839 units, according to JATO. The company sold 230 Model X SUVs and 133 Model S sedans.

Tesla said up to 500,000 Model Y midsize SUVs could be produced at the Grunheide plant once it is fully operational.

Tesla’s fourth-quarter net profit hit $2.3 billion, while revenue jumped 65% to $17.7 billion as the company managed to sell a record number of vehicles despite headwinds from the supply chain.

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