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Elon Musk Says That Tesla May Reduce Production Costs

(Image Credit Google)
During Tesla's most recent earnings call, Elon Musk stated that the company is developing a new platform that could cut production costs in half. According to Automotive News, this cheaper platform would be the company's third, and it's fueling rumors about the long-forgotten $25,000 Tesla, anecdotally known as the Tesla Model 2. Musk previously dismissed future plans for a lower-cost Tesla EV, partly because EVs are becoming more expensive to manufacture as raw materials become more valuable. And partly because no major automaker (certainly not Tesla) will voluntarily lower the price of its electric vehicles, despite Musk's insistence that electric vehicles would become cheaper over time as production and infrastructure scaled up. However, now that Musk is talking about a cheaper platform, the industry is speculating about what this means. On October 19, Musk stated, "We don't know the exact dates, but this is the primary focus of our new vehicle development team," referring to the rumored 50%-off EV platform, which would reduce costs compared to the one Tesla uses to manufacture the Model 3 and Model Y. The Tesla CEO went on to say that this less expensive platform would be used for a new electric vehicle that would eventually "exceed the volume of all other Tesla vehicles combined." Tesla May Cut Production Costs One of the rumors circulating is that a cheaper Tesla or a new EV will be used to build a fleet of autonomous vehicles intended for robotaxis rather than individual owners. This is consistent with Musk's earlier comments about a Tesla robotaxi that would not have any controls for driver input and would go into production in 2024. A stripped-down Tesla designed for fleets is an excellent candidate for a vehicle that must have a lower production cost. But, in a rare flash of insight — auto industry analysts and Tesla devotees admitted that Tesla's own habit of overestimating its production schedule and EV capabilities could mean that this new cheaper Tesla model will lack the capabilities required to be a working robotaxi, forcing Elon Musk to abandon the project in favor of the rumored $25,000 Tesla.

By Omal J

I worked for both print and electronic media as a feature journalist. Writing, traveling, and DIY sum up her life.

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