Musk and company executives outlined some of the steps they are taking to create a low-cost platform, including introducing a new in-house electric motor, adopting new manufacturing techniques and working with suppliers to bring down costs.

Global automakers have long used Mexico as a launching pad for affordable vehicles due to lower labor costs, but the country also now builds luxury models from brands such as Audi and BMW. Vehicles built in Mexico and Canada qualify for the $7,500 U.S. tax credit for EVs. Models built outside North America do not.

Emmanuel Rosner, an analyst at Deutsche Bank, said Tesla’s focus on cost and efficiency during the event was admirable, but the lack of detail on the next-generation platform was a letdown.

“Walking away from Tesla’s Investor Day, we were admittedly disappointed with the overall lack of details on its next-gen platform, including launch timing, vehicle segments and price points,” Rosner said in a research note. “All in, we expect a negative market reaction to the event today.”

Tesla executives outlined manufacturing and engineering efficiencies that could cut production costs for the new vehicle platform in half compared to the compact platform used for the Model 3 sedan and Model Y.

Adam Jonas, analyst at Morgan Stanley, said Tesla’s focus on slashing costs and scaling up production was the biggest takeaway from Investor Day.

“The non-unveil of Model 2 disappointed some people — but it shouldn’t have,” Jonas said in a research note.

“From our experience, auto companies don’t typically unveil far cheaper and potential better engineered products far in advance” of production, Jonas added. Otherwise, consumers might wait rather than buy current Tesla models.

The lack of details on the new model also means Musk isn’t pressured later on when his timeline comes up short. The Tesla Cybertruck, presented in 2019 and promised for 2021, won’t start production until later this year. And promises of a fully autonomous Tesla are many years behind schedule.

“Without major news to point to from the three-plus hours of presenting besides a Mexico factory project development announcement, Musk at least didn’t get many opportunities to offer new promises he can’t keep,” Caldwell said. “Maybe that’s enough of a win.”

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