Tesla reportedly plans to manufacture a €25,000 ($26,838) electric car at its factory in Berlin. This prospective new model will be considerably less expensive than the Model 3 which is the lowest priced model in Tesla’s current line-up, the base model of which costs in excess of €40,000 ($43,000). The currently untitled new electric car will aim to make electric vehicles more accessible to the mass market, competing with cars from brands such as MG and Nissan. The announcement came from a currently unnamed source, according to Reuters:
“Chief Executive Elon Musk visited the plant in Gruenheide on Friday and thanked staff for their hard work, a video showed on Musk’s social media platform X.
At the same meeting, he informed staff of plans to build the 25,000-euro vehicle there, the source said.
The German plant currently produces the Model Y, Europe’s best-selling EV.”
This move could be a significant step for Tesla as the high price of electric vehicles is currently one of the biggest hindrances to electric car adoption. This shows that Tesla is aiming to make electric vehicles more accessible to the mass market. While Tesla has previously cancelled plans to manufacture a more affordable electric car in 2022, it has reportedly made a breakthrough in the manufacturing process that will reduce costs, which this new model will likely make full use of.
While releasing a more budget-friendly model is certainly going to be a boost for Tesla, the effect of this on the wider electric vehicle market will be hard to quantify. Many car manufacturers already supply vehicles in this price range, and some European manufacturers have already released vehicles below the €20,000 mark, such as the Dacia Spring EV and the Citroen Ami. Outside of Europe, Chinese companies already have many budget models on the market. The real power behind a cheaper model of Tesla will be the Tesla brand which is synonymous with electric vehicles and may be more attractive to consumers than similarly priced competitors.
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