Tesla’s Elon Musk said it is working on a $25,000 electric vehicle with a next-generation battery.

Tesla's Elon Musk said it is working on a $25,000 electric vehicle with a next-generation battery.

Tesla announced that it will dramatically reduce the cost of battery cells and packs. This means that the company’s new target is a $25,000 electric vehicle. Elon Musk, the company’s CEO, New “table” battery cell, As well as by changing the material inside the cell, Tesla can cut its cost per kilowatt-hour to “half,” which would make an electric car about the same price as an internal combustion engine car.

The price per kilowatt hour (kWh) is the most commonly used unit of energy to measure the capacity of a battery pack in a modern electric vehicle. These prices have fallen sharply over the past decade, dropping 87% from $1,100/kWh in 2010 to $156/kWh in 2019.

Experts predict that the price will reach $100 per kWh by 2023, but Musk said Tesla will begin a three-year process to bring prices below that, but he has not revealed exactly what the target price is.

Batteries have more than just cells. A lithium-ion battery cell with a production cost of $100/kWh means a battery pack with additional components such as battery management and cooling systems will cost more than $125–$130/kWh.

Photo from Sean O’Kane / The Verge

Today’s battery packs cost around $10,000–$12,000 depending on capacity. Lower battery prices could be the key to unlocking cheaper and larger electric vehicles. Tesla aims to lower the cost of the pack in the future to less than $6,000, which will result in a cell cost of less than $100/kWh.

The average price of electric vehicles in the U.S. fell 13.4% from $64,300 in 2018 to $55,600 in 2019. And that’s mostly thanks to Tesla’s Model 3. However, that’s still high compared to the average price of a regular gas-fired vehicle at $36,600 (even though the price is rising).

The Model 3 was Tesla’s first car for a wider market. The company’s “master plan” from the beginning— Musk in 2006 blog post — Convince people that EVs can be cool, explain how to build a desirable electric sports car (which wasn’t an easy task at the time), use that revenue to fund a more affordable luxury sedan, That Efforts on cars that can be bought by hundreds of thousands of people.

But plans to make Musk’s $35,000 Model 3 Did not bear fruit, Thanks to the company’s well-documented “production hell”. Currently, the Model 3 Standard Range Plus starts at $37,990, the Long Range starts at $46,990, and the Performance starts at $54,990.

This is not the first time Musk predicts that Tesla will dramatically reduce the cost of electric vehicles. He said he first promised an EV of $25,000 in 2018 and that it will be possible in three years.

“I think that’s what we can do to get 25,000 cars,” Musk said in an interview. You Tuber Marques Brownlee. “But if we work really hard, I think we can do that in about three years.”

But on Battery Day, Musk added a new prediction: 20 million cars per year. This is “approximately twice” the current Toyota, GM or Volkswagen production. Tweet Author Ed Niedermeyer Outrageous: Tesla Motors’ unchanging story.

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