Elon Musk has announced that Tesla’s engineering team has turned its focus to a next-generation electric car platform that will be half the price of the Model 3/Y platform.
For years, Tesla has talked about making cheaper electric cars, but inflation and high demand for electric cars have driven up prices.
The automaker has talked about a next-generation platform enabling a $25,000 electric car in the past. At one point, CEO Elon Musk said Tesla was aiming to launch the cheaper vehicle as soon as 2023.
However, Musk announced that Tesla is not working on the cheaper electric car in 2022 as its focus has shifted to the Optimus robot and ramping up Model Y production.
The CEO even suggested that cheaper electric vehicles may no longer be in Tesla’s plans as self-driving has a greater impact on the cost per mile.
During the conference call following the release of Tesla’s third quarter 2022 financial results, Musk confirmed that this is still in the plans and that Tesla has shifted its engineering power to developing the next-generation EV platform that will enable cheaper electric cars:
This is obviously the main focus of our new vehicle development team. At this point we are done with the engineering for the Cybertrucks and the Semi. So, obviously that’s what we’re working on, a next-generation vehicle that’s probably going to be about half the price of the 3 and the Y platform. It will be smaller to be clear.
It sounds like a smaller Tesla vehicle platform is in development that will enable electric cars priced between $25,000 and $35,000.
Musk added that this new platform aims to produce more volume than “all other Tesla vehicles combined.”
Obviously, we’ll take everything we learned from the S, X, 3, Y, Cybertruck and Semi into this platform. But we’re on target 2 to 1. We’re trying to get to that 50% [of cost] number again.
The CEO believes Tesla’s next-generation vehicle platform will be able to produce electric cars for half the cost, labor and factory space required to produce the Model 3, which currently starts at $47,000.
We’re glad to get confirmation that cheaper electric cars are back on the cards for Tesla, though we have to take cost estimates with a grain of salt, as Tesla doesn’t have much of a track record in this regard.
The Model 3 was supposed to start at $35,000, which it only did briefly, and that was before the inflation crisis, and the Model S was supposed to start at $50,000, which it also briefly did, but with a software-locked version that was quickly discontinued.
So I don’t put as much weight on the cost estimates, but if the goal is cheaper mass production of smaller electric cars, Tesla will certainly end up with a platform that allows for smaller and cheaper electric cars, which will increase the EV market.
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