Tesla begins production on "more affordable model" amid Elon Musk backlash

Driving the news: Tesla said Wednesday in its second-quarter earnings report that it expects to achieve volume production of the new model in the second half of 2025.

• Tesla did not reveal details about what the affordable model would be called, what features it would contain or what the starting price will be. The starting price of the Tesla Model 3 — currently the company's cheapest vehicle — is $42,490, according to the automotive information provider Edmunds.
• Tesla also said it plans to hit volume production of its long-delayed Tesla Semi and the Cybercab robotaxi in 2026.

Zoom in: The company posted total revenue of $22.5 billion in the quarter, down 12% compared with the same period a year earlier.

• Net income was $1.2 billion, down 16%.

Context: Tesla has been facing a sales backlash over Musk's past political support of President Trump.

• The company's second-quarter vehicle deliveries fell 13.5%, compared with a year earlier.
• "We probably could have a few rough quarters," Musk said on an earnings call, noting the loss of federal EV incentives will hurt sales. "I'm not saying we will, but we could."

What to watch: How the company's initial robotaxi service in Austin, Texas, is performing.

• The company began the limited service in June with safety riders in the vehicles.
• "We will further improve and expand the service (more vehicles covering a larger area, eventually without a safety rider) while testing in other U.S. cities in anticipation of additional launches," Tesla said Wednesday in an earnings presentation. "Our efforts to refine the Robotaxi offering in Austin are not location-specific and will allow us to scale to other cities quickly with marginal investment."
• Musk said on the earnings call that half of the U.S. could have access to an autonomous Tesla ride-hailing service by the end of the year.

Editor's note: This story has been updated with comments by Elon Musk.