Tesla CEO Elon Musk has announced plans to build a 25,000-euro ($26,838) car at the company’s factory near Berlin, according to a source with knowledge of the matter. The carmaker, known for its electric vehicles, is aiming for mass uptake of its cars and expanding into the mass market is crucial to meeting its goal of increasing vehicle deliveries to 20 million by 2030. The source did not provide information on when production of the affordable electric car would begin.
During a visit to the plant in Gruenheide on Friday, Musk thanked the staff for their hard work and also informed them about the plans to build the 25,000-euro vehicle there. The German plant currently produces the Model Y, which is Europe’s best-selling electric vehicle.
Musk had long planned to create a more affordable electric car, but in 2022, he announced that he had not yet mastered the necessary technology and shelved the plan. However, sources have revealed that Tesla is closing in on an innovation that would allow it to die cast nearly all of the underbody of the electric vehicle in one piece, which would speed up production and lower costs.
To support its expansion plans, Tesla intends to double the German plant’s capacity to 1 million vehicles a year. However, the company has not provided any updates on the number of cars it produces at the facility since March. In an effort to boost sales, Tesla and other automakers have been cutting prices of electric vehicles due to the weak economy and high interest rates dampening demand.
Local authorities have requested further information from Tesla regarding how its expansion plans would adhere to nature conservation laws before making a decision on approving them. Meanwhile, Tesla has also announced a 4% pay rise for all its staff, with production workers receiving an additional 2,500 euros per year starting from February 2024.
Tesla’s wages have been a subject of scrutiny, with German union IG Metall stating in 2022 that Tesla wages were approximately 20% lower than those offered under collective bargaining agreements at other carmakers.
Ultimately, the introduction of an affordable 25,000-euro car is expected to bolster Tesla’s market position and contribute to the company’s efforts to drive the mass adoption of electric vehicles.