Elon Musk, the CEO of Tesla, has revealed that the company is working on a $25,000 electric car that will be available in three years. This news comes as a surprise to many, as Tesla has been focused on producing luxury vehicles up until this point. However, with this new announcement, it seems that Tesla is looking to make electric cars more affordable for the average consumer.
Elon Musk has revealed that Tesla's next generation of electric vehicles will be built on a new platform that is slightly smaller and significantly cheaper to build than the current model 3 and model y there's been a lot of talk over the past couple of years about Tesla finally releasing a truly Affordable Electric Car a hypothetical compact car that the internet dubbed the 25k Tesla or the Tesla Model 2.
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| Elon Musk Reveals The $25,000 Tesla Is Coming |
Although no details were ever put forward by the company at Tesla's battery day in 2022 Elon said that the company was anticipating that they could leverage new and cost-saving Battery Technology to produce a compelling fully autonomous EV at the 25 000 US dollar price point and he expected that to be released in 2023.
But in the meantime, we never got any solid updates on the progress of that new vehicle design at most we heard Elon say that they were going to do it eventually, and then he kind of said that they weren't considering it a priority to build a cheap car because autonomy would make it irrelevant and now on the most recent Tesla earnings call we just heard Elon say that the Next Generation vehicle platform is the primary focus of his new vehicle development team and that they are figuring out how to make a new car for half the cost of a model 3. so what could that possibly look like let's talk about it foreign.
The 25 K Tesla Lives
- Obviously, the big news here is that the dream of the 25k Tesla vehicle lives on which is a relief for many because it was just earlier this year that Elon said he was not working on this car at all on the Q4 2021 earnings call which happened in late January Elon said quote well we're not currently working on the 25 000 car at some point we will but have enough on our plate right now too much on our plate frankly which is totally fair.
- I don't think anyone would argue with that fact as the company was trying to bring two brand new Ultra Advanced manufacturing facilities online at the same time on separate halves of the globe while trying to deal with a massive production backlog also trying to figure out how to reliably manufacture a brand new type of battery that they developed themselves and working to bring.
- The long overdue Tesla semi and cyber truck to production but at the time Elon also seemed to have moved away from the idea of building an affordable car entirely he kind of insinuated that the purchase price of a vehicle doesn't really matter as long as the vehicle is autonomous he said quote really the thing that overwhelmingly matters is when is the car autonomous.
- I think at the point in which it is autonomous the cost of Transport drops by I don't know a factor of four or five which again is fair to say but I think realistically the majority of people on Earth still want to own their own car and drive their own car and that's not going to change anytime soon.
- People want to buy electric cars but so many of them don't have 50 or 60 Grand kicking around and they don't have the finances to tolerate that amount of debt either so an affordable purchase price still matters autonomy or no autonomy and for whatever reason.
- That seems to be the direction that Elon Musk has shifted because he's now saying that smaller and cheaper Vehicles will be the future of Tesla again.
- Elon told investors it's the primary focus of our new vehicle development team at this point we are done with the engineering for cyber trucks and for semis so it's obviously what we are working on for the Next Generation vehicle which will probably be about half the cost.
- The 3 and Y platform will be smaller to be clear and he followed that up by saying that the new platform will be produced in a higher volume than all of Tesla's other vehicles combined which is a pretty significant claim the model 3 and model y are spectacularly popular vehicles and that likely will remain the case for years or even decades to come so to say that there would be more of these new cars than both of those cars combined.
- Elon must be up to something that was really interesting is that Elon and also his Executives who were on this call were talking about this idea of what they call a two-for-one Target making two cars for the cost of one and that is something that the company has already accomplished to a degree the model 3 came in at about half the purchase price of the model S and the model Y is about half of a model X though we're not sure what the cost difference is between those two vehicle platforms we assume that the profit margin on a Model S is significantly steeper than the three.
- Elon is saying that reducing the size would obviously reduce the cost but he also talked about building the new generation of cars with half the amount of parts in half the amount of time a true two-for-one kind of deal while that may not translate directly to having the purchase price of the model 3.
This new car would obviously be cheaper to buy and likely buy a pretty significant amount we all know that the cost of goods from 2020 has abs absolutely no meaning in the world today the rate of inflation May subside and we could see price increases stabilize but the cost of goods is never going back down to where it was before. so 25 000 is a nice number it's fun to say but it's likely not a number that we're ever going to see on the Tesla website unless it's the cost of full self-driving in five years also got a lot of speculation rolling about whether or not.
The RoboTaxi Tesla
This new platform will become the new dedicated Robo taxi vehicle that has also been promised by Elon I wonder that the more that we think about it here if this car is going to be even smaller than a model 3 It seems less likely that it would be very practical as a mass transportation vehicle it certainly might have a part to play.
But a true Robo taxi network is going to require a large High occupancy vehicle that makes for very easy unloading and offloading of a wide variety of people and things the compact pod car is fine for an individual moving around the city.
But it's also a limiting factor for people who are too physically large to fit in a compact car either by width or by the height it's useless for people with physical disabilities it doesn't work for large families who want to travel as a unit no good for moving large amounts of cargo or baggage and also doesn't do anything to reduce Road congestion so the running bet around here is that the dedicated Robo taxi vehicle is going to look more like a large van shaped object probably built on a cyber truck platform and it will have very little in common with a traditional passenger vehicle design it'll be something wholly original but what do you think I know there are conflicting opinions.
Two Cars for the Price of one
How exactly could Tesla manage to drive down the cost of building a car by 50 and then scale that up to a volume of multi-million units per year well something else that Elon talked about on the call was the future of Tesla's battery supply and like many times before he stressed that iron-based cathode batteries will account for more than half of all users in the years to come and this is simply because they are cheaper and easier to produce?
- In addition to some benefits around cycle life and charging capacity, what's more, Tesla Executives on the call revealed that the company was working towards bringing iron-based Lfp battery cell production to North America this is a big deal right now Tesla only has access to this battery.
- Type through their partner call in China this is a big part of the reason that Giga Shanghai offers both the Tesla Model 3 and model y with the option for a standard range LFP battery packs while in North America.
- We can only purchase model 3 as a standard range offering those cell cells have to cross the ocean and that's a major setback to fully realizing the potential of this battery chemistry for cost reduction and production volume so in the same way that Tesla built their production.
- The hub for the 2170 nickel-based cell that exclusively powered the model 3 and why to America they're going to bring LFP production here as well likely using the same business model that they established with Panasonic for the 2170 Tesla builds the factory and establishing all of the infrastructures so that call can simply move in and start producing batteries this is going to be critical for this new vehicle if we remember back to battery Day in 2020.
- Elon was saying that the key driver to reducing electric vehicle cost was reducing battery cost and he intended to get overall battery costs down by 50 percent one of the ways he would do this was with new manufacturing techniques that the 4680 and the other was by using more sustainable chemistries for the lower range and lower performance applications that are LFP and bringing down the cost of the vehicle as a whole is going to require a massive simplification of the manufacturing process.
- Tesla Executives were talking about using half the amount of floor space to build a vehicle at half the cost and twice the speed so obviously, the Giga press is going to come into play to make that happen Elon has talked for a long time about his dream of making an entire vehicle with a single die casting the same way that a Hot Wheels toy is formed just scaled up to a real car.
Learning From The Cybertruck
I think that the production of the Cyber truck is going to inform a lot of what is possible for the new compact the Cyber truck frame is going to push the Giga casting process to new heights with the latest 9000-ton press currently making its way to the floor at Giga Texas it was originally thought that a 6 000 ton die casting machine was impossible to build.
But Tesla made it happen with their partner at idra and now they have taken that even further to 9 000 tons can they go further than that we've likely not found the physical limitation for this technology just yet so we can't rule out a single piece casted frame that's big enough for a compact car the Cyber truck is also a testing ground for this idea of building a vehicle with an exoskeleton body that replaces the internal unibody structure with a rigid outer shell on every other car.
The outer body panels don't contribute to the load-bearing structure of the vehicle they're just along for the ride but if the car has to have an outer shell then why not make it contribute to something by making it strong enough to carry a partial load when you distribute the weight across a larger area and the larger number of components you reduce the amount of load on each individual part and that means each part can be made smaller lighter and thinner AKA cheaper so maybe.
The production of Tesla's largest vehicle non-commercial vehicle at least can tell us a lot about how the company will tackle its smallest vehicle but we're going to have to wait a few months at least before we can even begin to see that happen so we are in for a long wait still and a lot more speculation in between so might as well kick start that speculation in the comments below what do you think is going on with this 25k Tesla product is it even possible to drive down the cost that far and what exactly is going to to be the end goal with these vehicles.
Why Elon Musk is so confident about the $25,000 Tesla?
Elon Musk is confident about the $25,000 Tesla for a few reasons.
- First, Tesla has made great strides in electric vehicle technology in recent years.
- Second, Tesla has a strong team of engineers who are capable of designing and building high-quality electric cars.
- Finally, Tesla has the financial resources to invest in the development of the $25,000 Tesla.
What features the $25,000 Tesla will have?
How the production of the $25,000 Tesla will work?
- Tesla plans to cut production costs by half in order to make a $25,000 electric car. This would enable the company to create a smaller, more affordable car that is fully autonomous.
- Musk believes that this is possible within three years, and it would be a very compelling car for consumers. This would be a huge breakthrough for the company and could revolutionize the electric car industry.
That’s all for now. I’d love to hear your thoughts on the new Tesla Model 3. What do you think of the design? The price? The range? Let me know in the comments below.