Tesla plans to build a €25,000 ($26,838) car at its factory near Berlin, reported Rueters. The information comes after “a long-awaited development for the electric vehicle maker which is aiming for mass uptake of its cars,” according to Reuters .
The source did not say when production would begin, said Reuters.
In 2022, CEO Elon Musk shelved the plan to create a more affordable electric car because he had not mastered the technology yet.
According to consumer surveys, the steep price of electric cars—and high interest rates—is a factor preventing the uptake of electric vehicles in both Europe and the United States.
In the first half of 2023, the average retail price of an EV in Europe was over 65,000 euros while it was just over 31,000 euros in China, according to autos research firm JATO Dynamics.
In September, sources said that Tesla was close to figuring out an innovation that would allow it to die cast nearly all of the underbody of the vehicle in one piece, said Reuters. This breakthrough would allow the company to speed up production and lower costs.
The plant where the car will be made currently makes the Model Y, which is Europe’s best-selling EV. Tesla also plans to increase the German plant’s capacity to 1 million vehicles a year.
While announcing the plans for the 25,000-euro car, the company also informed workers that all staff would receive a 4% pay raise from November onwards. Production workers would receive an additional 2,500 euros per year beginning in February 2024.
Meanwhile, automakers like Ford and GM are scaling back their electric vehicle plans amid a looming United Auto Workers Strike and decreased EV sales.