Tesla has significantly reduced the pricing of its automobiles during the last ten years. From the first sporty roadster through the Model S and X, the Model 3 and Y, and soon the Cybertruck and Roadster, Tesla has changed the way people think about electric automobiles. Tesla automobiles, however, remain out of reach and too costly for the great majority of people. To make a difference in its objective of dramatically decreasing global CO2 emissions, Tesla must deliver an EV that most people can buy.
Elon Musk remarked from the stage at last year's Battery Day, "We are convinced that long-term we can design and produce a compelling $25000 electric vehicle." "This has always been our ambition since the beginning of the firm, and I even like made a blog article about it since our first car was a costly sports car, then a little less expensive sedan, and then a mass-market premium model 3 and Y," he continued. But it was always our goal to create a truly inexpensive electric vehicle, and we are convinced that three years from now, we will be able to create a very attractive $25000 electric vehicle that is also fully autonomous.
So Tesla intends to build a car for $25,000 within the next three years. As we all know, Musk has a troubled history of meeting rigorous deadlines, and I believe this will be no exception. I don't think Musk has a strict timetable of three years, and we still don't know what it will be named. Elon Musk, on the other hand, says that this $25,000 automobile will be totally driverless, which is an intriguing detail to keep in mind.
All of this has been made possible by Tesla's tremendous battery advances, which we knew were on the way when the company revealed its own battery sales goals and new battery manufacturing procedures. Tesla, in particular, has reinvented the foundations of battery manufacturing, such as rolling dry electrodes into sheets using fewer gear and equipment, making things cheaper.
Tesla has also been looking for new raw material sources, including new relationships with a Nevada-based lithium mining firm. With all of these components in place, it's easy to understand why Musk believes a Tesla 25000 vehicle will become a reality within the next several years.
Tesla's big objective has always been to lower the cost of battery manufacturing in half since battery cost has been the limiting factor in making such a cheap automobile. Elon Musk promised us a $35,000 Model 3 back in 2016, yet we still don't have a $35,000 EV from Tesla, which was supposed to be the cheapest Tesla.
I recently acquired a basic Model 3 for around $42,415. When we evaluate the realities on the ground, with Tesla prices going up, doubters believe Elon Musk's claim of a $25000 EV in the next three years is a bit unrealistic.
However, I believe it is unfair to compare Elon's $35,000 EV promise to his latest promise of a $25000 EV since when he made the $35,000 EV promise in 2016, the Shanghai Gigafactory was still in the planning phases. The Shanghai facility is already rapidly scaling up production, with a target of producing 1 million vehicles per year. Looking back to Tesla's previous shareholder meeting in July, Tesla mentioned how they have localized supply chains in China, which reduces transportation and acquisition expenses even more.
Also, given that EV adoption in China is significantly higher than in other regions, notably in Europe and the United States, Tesla's $25000 vehicle is quite likely to be a China-first strategy. Because Tesla has been extensively investing in China, I believe the Shanghai Gigafactory will be the key to attaining the $25,000 TV in the next three years.
When you consider Tesla's Shanghai factory, which plans to increase production to 1 million Teslas per year, Musk's vision of a mass market Tesla $25000 car begins to take shape, and unlike all previous Tesla model unveilings held in California, this Tesla $25000 car will be the first to be unveiled in China.