Tesla’s array of electric vehicles may finally include a far more affordable vehicle. Elon Musk has recently announced that Tesla’s engineering team has shifted its attention to a next-generation electric car platform that will cost half as much as the Model 3/Y platform. However, there are several reasons to be skeptical about the news.
Previous Talks on Cheaper Electric Cars
Tesla has been promising to provide more affordable electric cars for years, but the tremendous demand for electric vehicles and inflation have caused costs to rise instead. The manufacturer has previously discussed a next-generation platform enabling a $25,000 electric car. At one point, Tesla CEO Elon Musk stated that the cheaper vehicle would be available as early as 2023.
However, later on, Musk revealed that Tesla would not be working on the cheaper electric car in 2022 since the company’s priorities had shifted to developing the Optimus robot and increasing manufacturing of the Model Y. The CEO even hinted that cheaper electric vehicles might no longer be in Tesla’s plans due to self-driving having a more significant impact on cost per mile.
Back on Track
During the conference call following the release of Tesla’s financial results for the third quarter of 2022, Musk confirmed that it remains in the company’s plans and that Tesla has redirected its engineering resources to the development of the next-gen EV platform that will produce cheaper electric cars:
“It is the primary focus of our new vehicle development team, obviously. At this point, we are done with the engineering for Cybertrucks and Semi. So, it’s obviously what we are working on, the next-generation vehicle, which will probably be about half the cost of the 3 and Y platforms. It will be smaller, to be clear.”
It appears that a smaller Tesla vehicle platform for electric cars priced between $25,000 and $35,000 is being developed. Musk further stated that this new platform plans to produce greater volume than “all of Tesla’s other vehicles combined.”
He continued:
“Obviously, we are going to take everything we learned from Tesla Model Y, S, X, 3, Cybertruck and Semi into that platform. But we are on a 2-for-1 target. We are trying to get to that 50% [of cost] number again.”
Musk believes that Tesla’s next-generation vehicle platform will be able to create electric cars for half the labor, cost, and factory space required to produce a Model 3, which starts at $47,000.
Tesla’s confirmation that cheaper electric cars are on the way is fantastic news, but we should take the cost estimates with a grain of salt since this isn’t the first time we’ve heard such a promise. Suppose the goal is cheaper mass manufacturing of smaller electric cars. In that case, Tesla will likely end up with a platform that enables smaller and more affordable electric vehicles, which will grow the EV market.
