Elon Musk advances an affordable Tesla: what price are we talking about?

    One of the most anticipated projects that Tesla claimed to have been working on even before the Model 3 hit the market was that of a small electric vehicle with a price of about 25,000 euros. The project, mentioned by Tesla CEO Elon Musk in 2021, appeared to have made its way as far as a Tesla design studio in China, where the company hoped to produce the car starting in 2023.

    It will come true?

    “In about three years, we’re confident we’ll be able to make a very compelling $25,000 electric vehicle that’s also fully autonomous,” Musk said in 2020. However, the project was shelved sometime in early 2022and Tesla focused on putting the Cybertruck and Semi into production, as well as opening new plants abroad.

    The Tesla Model 2, as it is sometimes known in Tesla fan circles and as seen in our rendering above, now appears to be back on the roadmap, but with no clear timeline. “At this point, we’ve done the engineering for the Cybertrucks and Semis, and it obviously goes against what we’re working on, which is the next-generation vehicle, likely to cost about half the price of the Model 3 and Model Y platformMusk said during the event held a few days ago in response to a question about Tesla’s third platform.

    “But I think it will certainly become, certainly will exceed, the production of all our other vehicles combined”, he added. We should note that Musk was likely referring to the cost of the platform for Tesla to build, rather than the final price of said car.

    a stable price

    Electric vehicle buyers have not overlooked the Tesla models have not gotten cheaper in the last three years. The Model Y is now a €51,200 car, while promises of a €35,000 Tesla Model 3 have long since vanished. The Model S, which is a decade old, although recently updated, is now over 100,000 euros.

    While Tesla’s recent price increases have been attributed to rising raw material costs and supplier strain, Industry analysts have also warned that there may not be much profit margin on a car below the Model 3, even if it is priced above $35,000.. Like other automakers, Tesla has an incentive to produce luxury versions of its offerings and charge more for them, since profit margins are higher on more expensive cars.

    With his recent comments, Musk seems to be backing down, hinting that Tesla has an interest in producing more copies of a less expensive model. Nevertheless, Cutting Model 3 production costs in half appears to be a more important task today than it was three years ago, as the electric vehicle industry continues to grapple with parts and raw material shortages..

    Still, it’s not lost on industry watchers that Tesla’s top debut concept of the year turned out to be a humanoid robot, which is nowhere near production, and is not in massive demand from buyers. Priorities have clearly changed in the last two years.

    Another thing that has changed is that Tesla will have a much larger field of competitors when its affordable model arrives, either in 2024 or later. The Fisker Pear is on the way in 2024, with a promised price below €29,000, while Sono Motors has just revealed a 25,000 EV in Germany. Other automakers are also getting into the game with crossovers priced just below the $40,000 mark.

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Elon Musk advances an affordable Tesla: what price are we talking about?