Tesla plans to build a $25,000-euro (just under $27,000 at current exchange rates) EV at its factor near Berlin, according to a Reuters report published Monday.
The report, cites an anonymous source with knowledge of the matter, but the source did not say when production would begin. CEO Elon Musk announced plans for the lower-priced EV during a visit to the factory Friday, the source told Reuters. The factory currently builds the Model Y, which is Europe’s top-selling EV right now.
2023 Tesla Model Y – Courtesy of Tesla, Inc.
As Reuters points out, citing data from research firm JATO Dynamics, the average retail price of a new EV in Europe in the first half of 2023 was over 65,000 euros (just under $70,000), compared to just over 31,000 euros ($33,000) in China. So Tesla could have a huge effect on the market with this—if it can get an affordable EV into production.
Tesla’s affordable-car project was first confirmed in 2021, then appeared to be put off by Musk, then appeared to be confirmed as revised late last year—with the announcement it was seeking to develop a platform for smaller EVs that would cost half as much to make. A report just this past summer suggested Tesla might be going after the affordable EV market in India instead.
Volkswagen ID.2all concept
In moving in a more affordable direction, Tesla will also be playing catchup to Europe’s largest automaker.
Volkswagen is working on a very affordable EV around the same price as the rumored Tesla EV, previewed with its ID2.all concept. It’s also shown an ID.Life concept that if produced could be even cheaper. When it was first shown in 2021, VW said the ID.Life targeted a base price of 20,000 euros, equivalent to about $24,000 at the time.
