Elon Musk’s vision for a $25,000 electric car back in focus

Nov. 8, 2023

Tesla has been working on-and-off on a cheap mass market car for years

Citing unnamed sources, Reuters is reporting Elon Musk announced plans for a new €25,000 Tesla during a site visit to the Texas-based company’s gigafactory outside Berlin, Germany on Friday. 

The German plant currently builds Tesla’s best-selling Model Y and the unnamed sources did not reveal when production of the new low-priced Tesla may begin. Considering how exchange rates are trending, €25k could soon be back around the $25k mark.

Towards Musk’s goal of making 20 million vehicles a year, Tesla first announced plans to build a cheap EV for the masses back in September 2020 at its now infamous Battery Day. 

Mr. Musk is no stranger to overpromising and underdelivering in the short-term. In January 2022, he told investors, “We have too much on our plate” when asked about progress on the Model 2 or Z, for lack of a better moniker. (Or perhaps the Cyberhatch?)   

In October last year Musk said the Texas-based company had gotten back to work on a vehicle that would likely be half the price of its two workhorses, the Model 3 and the Model Y, without giving any timelines or specific details. The pricing was also a bold target given how much battery metals were exchanging hands for at the time. 

Affordability firmly back on Tesla’s agenda

Commenting on its third quarter financial results, which came in below expectations, Musk said the company is now focusing on cost-cutting and keeping prices low for car buyers struggling with high interest rates. 

Tesla has certainly been doing its part on EV affordability. Last month it was revealed that the Model Y and Model 3 are now much cheaper than the average US gas-powered vehicle after aggressive price cuts over the past year.  

In September, the average price paid for an EV in the world’s number two electric car market was $50,683 — down from more than $65,000 one year ago, mostly on the back of Tesla’s price cuts.

The average retail price of an EV in Europe in the first half of 2023 was more than €65,000, according to the Reuters report, compared to just over €31,000 in China.

US car buyers can thank Tesla for making EVs affordable

Tesla is power hours ahead of rivals

The Adamas Intelligence EV Battery Capacity and Battery Metals Tracker shows us that Tesla’s full spectrum dominance of the EV industry is far from over despite a growing army of Musk naysayers.

Through the first eight months of 2023, there were just under 1.2 million new Tesla owners. That’s an almost 350,000 lead on its nearest rival BYD, which is only yapping at Tesla’s heels because the Chinese company moves a lot of plug-in hybrids.

Together, the Model Y and Model 3 control just under a fifth of the global market for battery electric vehicles (BEVs) after a 63% and 38% jump in registrations, respectively.

In terms of battery capacity deployed – in many was a better measure of market size  and potential – Tesla’s comes up just shy of 25% of all kWhs hitting roads in newly-sold EVs this year.

According to Adamas Intelligence data, the battery power in Teslas hitting the road year-to-date amounted to 86,197 MWh, while the world’s non-Tesla drivers had to share 273,661 MWh between them.

In terms of battery metals, 165,140 tonnes were inserted into the S,3,X,Y model line-up through the first eight months of the year. The BYDs, GACs, BMWs, VWs, ORAs, SGMWs and MGs of this world had to make do with 712,053 tonnes of lithium, nickel, cobalt, manganese, aluminum and graphite to build their batteries.

Adamas take:

Musk earlier told investors that Tesla faces “enormous challenges” to match production with demand for its 1m-plus preordered Cybertrucks. Apart from (in Musk’s words) the “hell’’ of ramping up production of an all-new vehicle, trying to match Chinese EV prices in Europe may be too much of an ask, even for Tesla. That said – given Tesla’s continued dominance on global markets with the horses it already has in the stable, and its ability to cut prices when needed, Musk may be satisfied with just the Cybertruck and S3XY model lineup for now.   

RELATED:  US car buyers can thank Tesla for making EVs (and luxury cars) affordable 



EV, Battery and Battery Materials Market Intelligence:

EV Battery Capacity and Battery Metals Tracker

Building on ongoing EV registrations in over 110 countries, our web-based platform helps users track monthly deployment of battery metals and materials, battery capacity, and the ever-evolving competitive landscapes of battery chemistries and cell suppliers.

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The ‘EV Battery Capacity Monthly’ is a subscription-based report for tracking monthly deployment of passenger EV battery capacity by EV type, region, country, make, model, cell supplier and cell chemistry on an ongoing basis.


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