Tesla CEO Elon Musk announced last week that the automaker would expand plans for its €25,000/$25,000 electric vehicle by building the car in Germany at Gigafactory Berlin. It was an announcement that would see the launch of a highly affordable EV in several regions, with Europe being the most recent.
Rumors of Tesla’s €25,000/$25,000 EV have been circulating for years, as the “Model 2” or “Model Q,” as it rumoredly will be called, would be the latest addition to the automaker’s lineup. Starting in Shanghai and making its way to Texas and Mexico thereafter, the vehicle will now be launched in Germany for the European market.
Of course, the pricing is relative to the region, and the €25,000 and $25,000 tags are just to reflect the expected cost of the car in its various markets.
But the big news is the fact that Tesla is truly planning to bring such an affordable vehicle to so many regions in an effort to stimulate more demand, open up access to its vehicles to new customers, and drop its pricing even further by offering a car that is at a very affordable price.
One of the biggest arguments against buying an electric car is still that they’re not affordable enough for the average person. Although transaction prices for Tesla EVs have been the primary driver in a decrease in average transaction prices for the sector this year, there are very few EVs out there that consumers consider “affordable.”
Even if the average transaction price of a Tesla is lower than the industry-wide average, there are still a lot of car buyers out there that are not willing to spend the amount of money that the company is asking for, even for the Model 3, which can get down near $30,000 after government and state incentives.
In countries outside the U.S., cheap EVs are more available, especially in China, where there are some that are at prices significantly lower than what Tesla can offer. Even if the product might be of lesser quality or equip significantly fewer features, some look at a car as only a depreciating asset, and they want to limit their spending on one as much as they can.
The new, affordable EV has been rumored to hit production lines in 2024, and after Musk’s announcement on Friday, it seems more likely than ever that this is a realistic timeline for the project.
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