Elon Musk’s cheap Teslas are the wrong kind of cheap

This hasn’t been a vintage year for Tesla product launches.

This Northern Hemisphere summer has launched a long-delayed robotaxi service that comes with a free man. Now it has introduced two long-awaited cheaper electric vehicles that are certainly not the game changer it was once promised.

But are they enough to do the job? It depends on what the job is.

If it comes to turning Tesla’s EV sales around, these “standard” versions of the Model Y and 3 are unlikely to be up to the task. Yes, they are cheaper than the base models before subsidies. But the deductions of around US$5,000 ($7,600) are less than the US$7,500 electric car tax credit lost for US consumers, leaving them closer to US$40,000 rather than US$30,000.

More importantly, price cuts are not a reflection of a game-changing production process. This plan was pushed aside in favor of increasing the use of Tesla’s existing assembly lines. Instead, Tesla’s famously spare interiors will get even simpler in these versions, as a number of features will be removed or dropped: shorter range, fewer speakers and touchscreens, cloth seats, manual steering, fewer color options, etc.

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There’s nothing wrong with less striking trim per se on a vehicle that aims to attract more customers. This is especially true when the political party your chief executive supports has withdrawn a sales-boosting tax credit and rivals are offering a variety of competing EVs to a domestic market poised to contract.

The USA needs cheaper vehicles. But this means Tesla, the pioneer of EVs, is now releasing lower-content versions of models launched before the pandemic.

Compare this to Ford Motor’s project to redesign its EV assembly line for a brand new $30,000 truck (in the implementation phase, of course), or China’s ongoing redefinition of what’s possible. Even Tesla’s “standard” terminology seems half-hearted for the company, which has forced itself to use terms like “gigafactory” and “robotaxi” in the vernacular.