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Elon Musk Promises Tesla Will Have a $25,000 EV by 2023

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【Summary】This isn’t the first time Tesla’s CEO has pitched the idea of an affordable electric car, but this time, Musk believes it’s possible because of its new tabless battery cells.

Original Vineeth Joel Patel    Sep 26, 2020 7:15 AM PT
Elon Musk Promises Tesla Will Have a $25,000 EV by 2023

In case you're not keeping an eye on everything Tesla does, the electric automaker recently held its Battery Day earlier this week. During the automaker's annual Battery Day, Tesla's CEO Elon Musk made quite a few announcements. New battery cells, a new Model S Plaid model, loads of preorders for the Cybertruck, an upcoming beta test of Tesla's Full Sell-Driving suite, and, this is the biggest piece of information, a more affordable EV are all in the pipeline.

Cheaper Batteries Means Cheaper EVs

Tesla, like many other electric brands, is working on reducing the cost of its battery cells and packs. Once this happens, Musk believes that Tesla will be able to offer consumers with a $25,000 electric vehicle. Tesla's timeline for the ultra-affordable EV, which will also be autonomous, is to have it on sale before 2023 – or three years from now.

The reason why Tesla will be able to offer one of its highly sought after electric vehicles at such an affordable price is because of its new tabless battery cells. The automaker is always working on changing the physical materials inside the cells to reduce how much they cost. These two things will allow Tesla, according to its own numbers, to reduce the price per kilowatt-hour by half, making EVs nearly the same price as vehicles with an internal combustion engine.

It's certainly a bold claim, as current battery packs in electric vehicles cost roughly $10,000 to $12,000. In order for Tesla to make its $25,000 car, its battery packs would have to cost somewhere around $6,000, putting the cell at roughly $100 per kWh.

Musk Had Made Promises Before

While the price of electric vehicles in the U.S. have been dropping over the years, it's certainly not to the point where companies can sell an electric vehicle with a useable amount of range for $25,000. TheVerge claims that prices have gone from an average of $64,300 in 2018 to $55,600 in 2019, which represents a 13.4 percent decline. With a similar decline over the next three years, Tesla won't hit its $25,000 mark. For comparison's sake, the average price of a gasoline-powered vehicle is $36,600.

"We're confident that long-term, we can design and manufacture a compelling $25,000 electric vehicle," said Musk.

Musk, though, has a way of overpromising technology, features, and vehicles to draw more consumers in. We should point out, that Musk himself stated that a $25,000 Tesla was coming in 2018. Back then, the CEO claimed that it was only three years away. By that math, it should be out in 2021, but it's nowhere to be seen. Now that Tesla's federal credits have ran out, the most affordable Model 3 starts at $39,190 (including destination). That's nowhere near the $25,000 mark.

So, when Musk says that a $25,000 electric vehicle is on the way in three years, we're a little skeptical, especially considering everything that happened with the $35,000 Model 3, which is harder to find than Bigfoot

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