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Tesla is redesigning the Model 3 to cut production costs and will produce the less complex version

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Tesla is ‘redesigning the Model 3 to cut production costs and will produce a less complex version in late 2023’ – as stock slumps 20% in wake of Elon Musk’s Twitter takeover

  • Tesla is working on a redesign of its popular Model 3 to reduce the vehicle’s complexity and cut production costs 
  • The company wants to reduce the number of parts needed to produce the popular sedan and the redesign could include changes to its exterior
  • Musk has said Tesla is looking to drive costs down with simplification 
  • Tesla stock is down 20% since Musk’s Twitter deal went through and one analyst said his work at the network is creating ‘negative sentiment’ for the automaker

Tesla is reportedly working on a redesign of its popular Model 3 to reduce the vehicle’s complexity and cut production costs.

The company wants to reduce the number of parts needed to produce the sedan and the redesign could include changes to its exterior and powertrain performance.

The revamp will go into production at Tesla´s factory in Shanghai and the company’s Fremont, California plant, two sources told Reuters. Tesla´s Shanghai Gigafactory will put the redesigned Model 3 into production in the third quarter of 2023, they said. 

Musk – who is running Twitter and facing a backlash on that platform from advertisers – has said Tesla is looking to drive costs down through simplification and working on a small-car platform that would be half the cost of the Model 3.

Tesla is working on a redesign of its popular Model 3 to reduce the vehicle’s complexity and cut production costs

The company wants to reduce the number of parts needed to produce the sedan and the redesign could include changes to its exterior and powertrain performance

The company wants to reduce the number of parts needed to produce the sedan and the redesign could include changes to its exterior and powertrain performance

‘Over and over, we found parts that are not needed. They were put in there just in case or by mistake. We eliminated so many parts from a car that did nothing,’ Musk said in an interview at a Baron Funds conference earlier in the month.

The news comes at a perilous time for Musk and the automaker. 

Morgan Stanley recently sampled Tesla investors and found that Musk’s involvement with Twitter ‘has contributed to negative sentiment momentum’ in the stock.

Morgan Stanley analyst Adam Jonas told MarketWatch that survey results reinforced his views about the negative impact of the Twitter saga on Tesla ‘and could drive some degree of adverse downside skew to Tesla fundamentals.’ 

Tesla has lost about $500 billion of market cap in the past couple of months and the stock is down about 20% since Oct. 28, when the Twitter deal went through, the business outlet reports. 

Musk’s firm is facing increasing competition in the EV market as more mainstream automakers such as China’s BYD, Hyundai and BMW produce hybrid or all-electric models. 

It remains to be seen when production would start at the Fremont plant, how large a cost savings Tesla would achieve from the proposed redesign or if the company would pass the savings on to consumers. 

Tesla has lost about $500 billion of market cap in the past couple of months and the stock is down about 20% since Oct. 28, when the Twitter deal went through, MarketWatch reports

Tesla has lost about $500 billion of market cap in the past couple of months and the stock is down about 20% since Oct. 28, when the Twitter deal went through, MarketWatch reports

Morgan Stanley recently sampled Tesla investors and found that Musk’s involvement with Twitter ‘has contributed to negative sentiment momentum’ in the stock

In the third quarter, Tesla made a profit of just over $9,500 for every car sold, compared to roughly $1,300 for Toyota, according to disclosures by both companies

In the third quarter, Tesla made a profit of just over $9,500 for every car sold, compared to roughly $1,300 for Toyota, according to disclosures by both companies

A ruthless focus on efficiency is part of what has made Tesla the most profitable electric vehicle maker as many of its rivals run at a loss. 

In the third quarter, Tesla made a profit of just over $9,500 for every car sold, compared to roughly $1,300 for Toyota, according to disclosures by both companies. 

Ed Kim, president of AutoPacific Group, which tracks market trends and production, said the current Model 3 has already been updated from the version that first went on sale in 2017 because of the way Tesla updates battery performance, information and entertainment options through software, even if it still looks the same.

‘Having said that, consumers still tend to equate visual changes with newness,’ he told Reuters. ‘Tesla knows visually tangible changes are in order.’

‘The upcoming changes that potential customers can see and feel will be very important in ensuring that EV customers still have Tesla at the top of their minds as truly excellent alternatives to Tesla are starting to flood the market,’ he explained.

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