Musk teases $25,000 Tesla in the next 3 years

Tesla Model 3

Today, the least expensive Tesla in the lineup is the approximately $38,000 Model 3.


Ultraperformance $140,000 Plaid models and fancy self-driving tech are cool (and certainly what brings all the fanboys to Tesla’s yard,) but I think that the only way electric cars will ever have a shot at replacing the combustion engine type is to bring the price way down. Fortunately, it seems Tesla CEO Elon Musk also knows this and he’s “confident” that the electric car company can build a $25,000 electric vehicle in the next few years.

At Tesla’s annual shareholder’s meeting and Battery Day 2020 event, Musk and Drew Baglino, Tesla senior vice president of Powertrain and Energy Engineering, outlined an extensive plan to reduce the cost of battery and electric vehicle manufacturing with changes to nearly every aspect of how Tesla builds cars.

Tesla estimates that a 14% reduction in cost per kilowatt-hour can be achieved with its new “biscuit-tin” battery cell design and a further 18% from its new smaller, more efficient Terafactory manufacturing design. By streamlining how the batteries are put together, Tesla estimates that it will be able to manufacture 100 gigawatt-hours’ worth of battery capacity by 2022 — that’s on top of the cells that it buys from suppliers LG and Panasonic — stretching to 3,000 GWh (3 terawatt-hours) of production capacity by 2030.



Further gains from new silicon anode chemistry, innovations in lithium recycling and nickel cathode chemistry and a new “structural battery construction” technique — which also leads to a lighter, stiffer EV chassis — add up to an estimated 56% total reduction in cost per kWh. The benefit is an estimated 54% increase in vehicle range from the same energy capacity and lower manufacturing cost. And the company is sure that it can pass that reduced cost onto the consumer.

“What does this mean for our future products? We’re confident that long-term we can design and manufacture a compelling $25,000 electric vehicle,” Musk stated to the honking applause of his socially distanced audience, viewing the presentation drive-in-style in individual Tesla Model 3 sedans — the automaker’s current approximately $38,000 affordable electric sedan.


Tesla shareholders showed their socially distanced approval by honking the horns of their individual Model 3s.


“Our first car was an expensive sports car and then a slightly less expensive sedan and then the mass-market premium Model 3 and Model Y,” continued Musk. “But in the early years, it was always our goal to make an affordable electric car. I think probably in about three years from now we can make a very compelling $25,000 electric vehicle that’s also fully autonomous.”

This is maybe not the most bombastic claim that Elon has made (or the most controversial), but the impending arrival of EVs with usable range and compelling value is probably the most exciting bit of news today for fans of the intersection of affordable cars and electric ones. During the course of his presentation, Musk also stated a goal of eventually building 20 million cars per year — a number derived from a desire to replace “a least 1% of the total vehicle fleet on Earth.”

Of course, Musk then capped off the show with a sizzle reel highlighting the ultraperformance Model S Plaid’s “beyond Ludicrous” track time at WeatherTech Raceway Laguna Seca. I suppose you’ve gotta finish with a bang.

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