Musk Says Tesla Could Build $25,000 EV In Three Years

Elon Musk says it could be possible for Tesla to build an electric vehicle that costs no more than $25,000 in roughly three years.

During an interview with popular tech YouTuber Marques Brownlee, Musk asserted that building such a vehicle would require the company to achieve a series of technical advancements in the coming years, while also radically improving its economies of scale.

Musk first spoke about a potential sub-Model 3 vehicle in June, claiming that a compact car could launch within the next five years. While such a vehicle sounds intriguing, don’t get your hopes up about seeing it before the middle of next decade, if ever.

It’s been two and a half years since the Model 3 was unveiled in prototype guise with a claimed $35,000 starting price, yet this entry-level variant remains unavailable. In fact, it is hard to purchase a Model 3 for less than $50,000 at the moment and that’s unlikely to change anytime soon. Building and offering a vehicle for $25,000 will be a whole different ball game for the car manufacturer.

A few months ago, a report from a group of German engineers suggested that it costs approximately $28,000 to build the Model 3, roughly $10,000 of which is for labor and production costs, with the rest coming from the materials. If Tesla wants to build a vehicle for $25,000 and make money from it, it will have to cut those costs to well under $20,000.

Although such a vehicle seems rather far-fetched at the moment, one has to respect Musk’s goal of making electric vehicles accessible to the masses.