Electric vehicles are still an emerging market and price is one of the major factors still tripping up wider spread adoption. But Tesla may have a plan in place to build a much more affordable EV.
According to a report from Reuters, the U.S.-based automaker is planning production for a 25,000-euro electric vehicle at its factory near Berlin. That price would put it at just less than $27,000, considerably lower than the current average going rate.
As the report points out, the average cost for an EV in Europe hovered around 65,000 euros in the first half of the year. It’s not much better in the U.S. Cox Automotive data from earlier this year showed Americans paying around $53,000 for new EVs during August 2023. Of course, that’s emblematic of the entire automotive industry, not just EVs. The average cost for new vehicles fell this year but is still sitting around 48,000, according to Kelley Blue Book.
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The relatively low-cost Tesla marks a bit of an about face for the company and its CEO Elon Musk. As Reuters notes, Musk last year said that Tesla was not currently working on a $25,000 model like the one he mentioned in 2020.
The change of heart could come from Tesla’s investments in giga casting. The company has been designing massive presses for forming large sections of its vehicles’ underbodies. The technology has the potential to vastly reduce the number of individual parts needed to assemble a vehicle, and consequently reduce the time and cost associated with production. All of that should theoretically result in lower prices for consumers.
Tesla has a stated goal of selling 20 million vehicles by 2030. The company said it sold about 1.3 million vehicles in 2022 so it still has a long way to go if it wants to meet that ambitious objective. A roughly $25,000 EV would help greatly in driving adoption and getting Tesla over the 20 million vehicle mark.