For a few years now, Tesla CEO Elon Musk has been briefly, occasionally, and somewhat mysteriously mentioning a potential low-cost Tesla vehicle that would have a starting price significantly below the starting price of the Tesla Model 3. While Tesla’s Secret Master Plan basically concluded at the production of a mass-market electric car — the Tesla Model 3 — the cold reality is that a $40,000 starting price is still well beyond the reach of an average American household, let alone an average global household.
Before we go forward on this topic, it should be acknowledged that Musk did say, at least once, that Tesla wouldn’t produce a lower-priced model than the Model 3. That was a few years ago, though, and it’s clear that Musk’s perspective on the matter has evolved over time.
During the Q2 2020 Tesla shareholder call, Musk had a particularly ear-catching statement: “The thing that bugs me the most is that our cars are not affordable enough. We need to fix that.”
Having closely followed and covered Musk for nearly a decade, that line came across as more than a “maybe we should do something about this” kind of statement. It rang of a hint, like saying: “We’re working on a lot behind the scenes in order to bring a lower-cost Tesla to market. Stay tuned.” It implied to me that Tesla was getting more serious about moving another step lower in the vehicle cost category.
And, as I noted last month, there’s been rumor that a Chinese design team is working on developing a somewhat smaller and more affordable car than anything Tesla offers at the moment. Indeed, it’s been assumed for a long time that Tesla will have a significantly cheaper model on the Chinese market — but many have wondered if that model would just be for China and similar markets or if there’d be a much more affordable Tesla (the same one or not) in Europe and the US.
We now have confirmation that Musk does plan to spread the love and make cheaper Teslas available around the world. We also learned that different lower-cost vehicles will be developed in different markets — at the least, one will be designed and developed in Europe while one will be designed and developed in China. The work designing and developing those cars will be done at Giga Berlin and Giga Shanghai.
Both will do original cars
— Elon Musk (@elonmusk) September 28, 2020
Giga Shanghai & Berlin will be designing entry level EVs ($25K car) in their respective markets #Tesla https://t.co/NEMNshZENF
— Marge ♥️ (@Manic_Marge) September 28, 2020
What that does leave open for speculation is whether the United States will also get an entry-level Tesla that comes in at $25,000 or so. We’ll have to wait for more tweets and the gradual passing of time to learn the answer to that, but I would assume the answer is “yes.”
As a final note, aside from Tesla designing a smaller, cheaper vehicle, Paul Fosse recently wrote an interesting article for CleanTechnica on how Tesla could lower costs significantly with some financial wizardry. Check it out: “How Tesla Could Use Its Financial Strength To Drive MASSIVE Demand For Electric Cars — $87/Month Lease?” He also had a piece on how Tesla could significantly cut total cost of ownership, an option that may be much more likely on a smaller entry-level Tesla. For more on that, see: “Tesla Tire Costs 10× Battery Cost, & My Plan To Deflate Tire Costs 90%.”
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