Tesla $25000 Electric Car Promise

The price will no more any reason not to buy Tesla. That means no single reason left.

This battery day had a lot of discussion about the batteries and how Tesla is aiming to achieve a cost of less than $100 per kWh (a metric used to track the price of batteries), which will significantly reduce the cost of the vehicle to achieve the “Musk-promise” a $25,000 Electric Tesla with full autonomous capacity.

Yeah, we all remember the promise he made for $30000 Model 3 that rose to $ 35K and was sold for much more than that. But to dominate the “mass-market” Elon has to achieve this target.

So,

When did it all start?

Elon Musk’s secret Tesla Motors Master Plan, which was an article that he wrote in 2006 publicly telling everyone his ultimate strategy for Tesla Elon Musk summarized his master plan as building a sports car using that money to build an affordable car and further using that money to build an even more affordable car.

And we can see that they are doing what they had in the master plan. It all started with the first sports car-roadster with 2500 units, and then came Model S and X, which were more affordable.

Both Model S and X combined approached 100,000 units per year. They were able to hit a big market by reducing the price. Model 3 and Model Y are Tesla’s third-generation cars that complete the master plan.

Elon Musk had promised an affordable $35,000 vehicle, which is about half of the base price of the Model S with advances in manufacturing technology and better economies of scale, thanks to much higher production targets.

Tesla achieved this in 2019 with a 220-mile range model three, that was priced at $35,000 before incentives. While this vehicle has since been replaced by a $37,990 standard range plus that has 263 miles of range, even after incentives and savings in the US.

This vehicle starts at $30,190 which makes it highly affordable and competitive against traditional internal combustion engine vehicles. This marks the completion of Tesla’s master plan.

And now a target of $ 25000 Electric Vehicle will do wonders for Tesla. Model 2 (name suggest by rumors) is still a project, but Tesla has made plans to achieve it. That’s how it’s gonna take control of the entire automobile industry.

But,

What’s the plan? How they’re gonna do it?

Well, what do you think, how the cost of the vehicle gets reduced?

Reduce the cost of the battery. As simple as that. (No, not that simple).

At the moment, the type of battery used by other automakers in electric models is prismatic. This requires specialized and careful welding which is done at small levels.

They need pinpoint accuracy to make this sheer size cell. No doubt, it works perfectly in terms of efficiency and power, yet it takes good labor, and hence the cost is high.

After using the 18650 and 2170 battery, Tesla has come up with a new and unique design. The 4680, a tabless battery.

So how about saving time, money, and precious metals to creating a product that is more robust and easier to produce. That’s the aim of the tabless battery. It doesn’t require a complex welding process.

In fact, it doesn’t require welding at all. It uses bumps, spikes, ridges, and cavities, which help layer attract each other naturally. These cells are bigger than the previously used ones which makes them 6 times more powerful, has 5 times more energy (energy, not energy density), and a 16 % overall range.

It can be easily manufactured on a large scale basis and would reduce the cost by 14 % kWh per hour. So now, by reducing the cost of the battery, making it more efficient at the same time, Tesla is aiming to reduce the cost of the vehicle making it within the reach of everyone.

It has also less ohmic resistance, which will enable it to charge super fast. That’s why Elon has filed a patent in 2020 for this battery. And guess what, Panasonic is chosen for this 4680 cell. In the past, the 2170 battery was also produced by Panasonic which is used in Tesla Model S and Y.

Elon Musk wants to take charge of the whole production process including batteries, so this contract may not be permanent with Panasonic. And thus, wants to reach $100 kWh per hour to produce cheaper cars.

How these $25000 Electric cars will change the market for Tesla?

Now it is easy to understand. No matter how big advancements this company is doing in technology to add more benefits, the present situation is it has not reached the big market.

The average price of a car in the United States is about $32,000 and so Tesla’s most affordable offering is still leaving out more than half of the market.

Volkswagen and Toyota, which each sell 10 million vehicles per year can hit significantly lower price points with their most affordable models which contributes to their massive market share. That’s why Tesla is now targeting the $25,000 range with a brand new set of vehicles in Elon Musk’s masterplan.

He outlines that Tesla intends to expand the electric vehicle product line by addressing all major segments. And to do this, Tesla is looking at compact cars, that will start at $25,000.

These will be mass-produced and due to their low price point will likely outpace the demand for model 3 and model Y. Tesla began bringing up the Shanghai Giga factory.

They announced that they would be opening up a design and Research Center in China. Elon Musk intends to go from “Made in China” to design in China.

Making a vehicle that is designed locally aims to better suit what the local population wants and needs that may not be apparent if the vehicle was designed purely in the United States, and then having to design export it to China.

Tesla is looking at recruiting designers and engineers to make a compact vehicle specifically for the Chinese market and in the $25,000 range. This would appeal to the wide population. Elon Musk is looking to dominate the market and to compete with other local firms such as Neo and BYD.

And the best way to do this is to have something built by the people who know their culture the best. The government is embracing EVS and will support Tesla in its quest for mass production.

So you will have a good reason to buy an EV with over 300 miles of range and is equipped with better technology than the VW Golf. It will be cheaper than the VW Golf, and there is no doubt, this vehicle will enable Tesla to reach the “mass-market” they have been dreaming of.