Tesla, the iconic electric vehicle (EV) maker, is planning to manufacture a euro 25,000 ($27,000) entry-level car from Germany and Elon Musk’s firm may set aside this budget car for markets such as India and other emerging economies.
Tesla’s India plan
Tesla is also in advanced talks with the Indian government for setting up a manufacturing unit in the country and the Indian plant may also produce a budget car — possibly a different version.
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| The first Tesla budget car may be a hatchback. |
The plan, if any, may help Tesla enter the budget EV space in a big way and could aid the brand ramp up sales in the global electric car space, making it the undisputed king in the EV segment.
Tesla silent on budget car from Germany
Tesla has been keeping mum on the Germany car plan. However, this buzz has seen Tesla’s shares experience a substantial jump on the US bourses.
The relatively high cost is coming as a roadblock in the widespread adoption of electric cars in Europe and the United States. It is believed that Tesla’s budget car in Germany may help reduce the cost by $1,000 per car.
High cost of EVs in Europe, US
Also, the cost of electric cars is very high and this has been compounded by high interest rates globally.
In the first half of 2023, the average retail price of an EV in Europe surpassed euro 65,000 ($69,000), according to automotive research firm JATO Dynamics. In comparison, the price of an electric car in China is only euro 31,000 ($33,000).
Tesla’s chief executive officer (CEO) Musk has been talking about developing a more affordable electric car.
Tesla new innovation to slash costs
In September, there was news that Tesla has made significant progress with an innovation that would enable the casting of the entire underbody of EVs into one piece. This, if true, would ramp up production and slash costs.
Tesla’s plan to grow in the mass market is critical in achieving its target of delivering 20 million vehicles by 2030.
This will help it take on rivals like Volkswagen (especially in Europe), which is more concerned about protecting margins during its transition into becoming fully electric.
Tesla production target in Germany
Elon Musk recently visited the Tesla plant in Gruenheide, Germany, and announced plans for a euro 25,000 car. The German unit currently produces the Model Y, the best-selling electric car in Europe.
Tesla is targeting to double manufacturing capacity at its German plant, with the goal of producing up to 1 million EVs a year.
The company had last released production figures (for Germany) in March, where it said it produced 5,000 vehicles per week, translating into 250,000 vehicles a year.
Tesla hikes wages in Europe
Moreover, Tesla unveiled that production workers will get an additional euro 2,500 ($2,600) per year from February 2024, representing an 18 per cent pay hike over a half-year period.
A German union had said that Tesla’s wages were about 20 per cent lower than those offered by other car manufacturers in that country.
E-Vroooom’s views
Tesla’s $27,000 entry-level electric car from Germany may be exported to India, and if so, it could indicate that Tesla may not have an immediate plan for India manufacturing.
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