Tesla is working on a next-gen electric car platform for half the price

Elon Musk has announced that Tesla’s engineering team has focused on a next-generation electric car platform that will cost half the price of the Model 3/Y platform.

For years, Tesla has been talking about making electric vehicles cheaper, but inflation and high demand for electric cars have driven prices up instead.

The automaker has talked about a next-gen platform enabling a $25,000 electric car in the past. At one point, CEO Elon Musk said Tesla was aiming to release the least expensive vehicle as early as 2023.

However, Musk announced that Tesla isn’t working on the cheaper electric car in 2022 as his focus has shifted to the Optimus robot and ramping up production of the Model Y.

The CEO even suggested that cheaper EVs might drop out of Tesla’s plans because self-driving has a bigger impact on cost per mile.

During the conference call following the release of Tesla’s third quarter 2022 financial results, Musk confirmed that it was still in the plans and that Tesla had shifted its engineering power to platform development. Next-generation EV that will enable cheaper electric cars:

This is obviously the main objective of our new vehicle development team. At this point we are done with engineering for Cybertrucks and for Semi. So that’s obviously what we’re working on, the next-gen vehicle, which will probably be around half the cost of the 3 and Y platform. It’ll be smaller, to be clear.

It looks like a smaller Tesla vehicle platform that will allow electric cars between $25,000 and $35,000 is in development.

Musk added that this new platform aims to produce more volume than “all of Tesla’s other vehicles combined.”

He added:

Obviously, we’re going to incorporate everything we’ve learned from S, X, 3, Y, Cybertruck and Semi into this platform. But we’re on a 2 to 1 target. We’re trying to get to that 50% [of cost] number again.

CEO estimates Tesla’s next-generation vehicle platform will be able to produce electric cars for half the cost, labor and factory space it takes to produce a Model 3, which currently starts at $47,000.

Electrek’s Grasp

Glad we have confirmation that cheaper electric cars are back in the cards for Tesla, though we should take the cost forecast with a grain of salt since Tesla doesn’t have a great track record on this.

Model 3 was supposed to start at $35,000 which it only did briefly and that was before the inflation crisis and Model S was supposed to start at $50,000 which it did also briefly made, but with a software-locked version that was quickly discontinued.

So I don’t care much about cost forecasts, but if the goal is cheaper mass production of smaller electric cars, Tesla will definitely end up with a platform that enables smaller electric cars and cheaper, which will increase the market for electric vehicles.

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