“Much cheaper” Tesla model one step closer

A more affordable Tesla model has come a step closer to reality after company boss Elon Musk confirmed that the automaker is still considering a cheaper electric car to appeal to a broader customer base.

Tesla CEO Elon Musk said at an economic forum during the G20 summit in Bali, Indonesia that a cheaper electric car would make “very good sense”.

Corresponding autoblog, Musk was asked about the prospect of Tesla introducing models for sale in developing countries like India and Indonesia.

“I can’t talk too much about the future of Tesla product development other than that we think making a much more affordable vehicle would make a lot of sense and we should do something,” he said.

It’s not the first time Musk has hinted at the possibility of a new entry-level Tesla. A smaller model with a target price of $25,000 is in the company’s plans for 2020.

He then backtracked on that promise in January 2022, saying the company was “too busy” to work on the new small car before committing again until October 2022.

“We don’t want to talk specifically [launch] appointments, but that [new model] is the primary focus of our new vehicle development team,” Musk told investors last month.

“At this point we’ve done the engineering for Cybertruck and Semi, so guess what we’re working on, the next-gen vehicle that’s probably going to be about half the cost [the Model] 3/Y platform. It will be smaller to be fair.

“But I think it will … certainly exceed the production of all our other vehicles combined.”

Tesla’s cheapest model right now is the Model 3 sedan, which is now available in Australia from $65,500 before road costs after a price increase of 9.3 percent in June 2022.

However, relative newcomers like the BYD Atto 3 and MG ZS EV have been able to beat those prices with smaller vehicles, both of which start at $44,990.

The prices of Tesla’s electric cars — like other manufacturers — fluctuate based on the cost of the raw materials and equipment used to make them.

In October 2022, it slashed prices for Model 3 and Model Y cars sold in China by 9 percent, citing a cost reduction due to increased capacity at its Shanghai Gigafactory. Reuters reported.

“Tesla adjusts its prices based on commodity costs and has raised prices several times this year globally in response to these higher costs,” said Seth Goldstein, strategist at US financial firm Morningstar, in an analyst note released by capital city.

“As some commodity prices start to decline, it makes sense that Tesla would cut prices accordingly.”

Speaking via video link at the business conference in Bali, however, Musk appeared to imply that he had more pressing issues than developing a more affordable electric car.

“My workload has increased quite a bit lately,” he told attendees, likely referring to his recent acquisition of social media platform Twitter.

“I mean oh man. I have too much work on my plate, that’s for sure.”