Elon Musk’s Tesla plans to develop the cheapest Tesla on the market at its gigafactory in Berlin, costing around €25,000.
According to sources, when visiting the Berlin-Brandenburg gigafactory on Friday, Musk unveiled the company’s plans to build the cheapest Tesla to date, making the luxury EV brand more affordable to motorists to increase uptake.
Clocking in at €25,000, the new affordable Tesla model would be significantly lower than the average entry price for an EV in Europe and also competitive with the Chinese market.
Production of the new model could begin as early as 2024.
EV prices are limiting uptake
Undoubtedly, EVs will be essential in reaching global climate targets, transitioning from petrol- and diesel-powered vehicles to their electrified counterparts and helping curb emissions significantly.
However, despite having an abundance of EV technology and a growing network of EV charging to support it, the price of EVs is a major speedbump that is stopping many drivers from switching lanes to electric.
Reports suggest that in 2022, the average price of an EV in Europe was €56,000, a 14% increase from 2015. This also means that the average price of an EV is 27% higher than that of a petrol car in Europe.
With the EU banning the sales of petrol and diesel cars from 2035, making affordable EVs will be essential, ensuring that no one gets left behind in the transition and incentivising motorists to go electric.
Tesla’s plan for affordable EVs
Although Tesla offers EVs more on the affordable side of the spectrum, with the Model 3 available for around 35,000 in the US, this price point still deters some drivers.
Musk has been teasing an affordable Tesla model for years now, striving to capture a larger portion of the EV market.
However, this vision has failed to become a reality due to technological limitations, with Tesla struggling to limit production costs.
Now, with rumours of the company’s cheapest Tesla gathering pace, Musk’s affordable EV dream may come to fruition.
The EV is set to be developed at Tesla’s Berlin gigafactory, the company’s first and most advanced manufacturing facility in Europe.
The gigafactory is Tesla’s first location in Europe that is capable of manufacturing both battery cells and EVs in-house.
By developing their models this way, Tesla can drive down the production costs that once hampered plans for an affordable EV.
Tesla targets deliveries of 20 million EVs by 2030. Earlier this year, the company announced plans for the Berlin gigafactory to achieve an annual production capacity of one million EVs.
Ramping up the development of the cheapest Tesla could be key to achieving this goal.
