Shares of Tesla in New York are higher in premarket trading after several reports said the company plans to reveal an affordable electric vehicle to be produced at its Giga Berlin-Brandenburg plant in Germany.
Reuters spoke with a source familiar with plans to build a 25,000-euro ($26,838) car at its Berlin-Brandenburg plant. There was no further information about the production start date or any specs on the new vehicle, which is planned to be the cheapest offering for the mass EU market. Currently, Tesla's least expensive car in Germany is the Model 3, starting at €42,990.
According to autos research firm JATO Dynamics, the average price of an EV in Europe in the first half of 2023 was around €65,000. The steep rise in auto borrowing rates plus high vehicle prices has crushed demand for EVs.
Last Thursday, X account Gigafactory Berlin News first revealed the upcoming €25,000 EV - days before Reuters.
#GigaBerlinBrandenburg@elonmusk announced today during his visit to GigaBerlin that a 25k € Tesla will be built here.🔥🚗 pic.twitter.com/EmdYXQAUOS
— Gigafactory Berlin News (@Gf4Tesla) November 3, 2023
EV blog InsideEVs said Tesla CEO Elon Musk visited Giga Berlin last Friday and told staff about the new affordable car. However, the blog said, "We tried to find additional confirmation of this report, but apparently, the speech was limited only to employees and there is no video."
Musk had long planned to make a more affordable EV. He said in 2018 that a low-cost version of a car would take three years to develop, admitting it was "really tough" to produce because of the auto industry's economics and competition. In 2020, Musk pushed the affordable EV timeline three more years.
Tesla shares are up 2% in premarket trading.
The news of the affordable EV could be a move by Musk to crush competition in an ongoing price war that Tesla appears to be winning. Some EV-makers might go bankrupt in the process while they attempt to compete with Tesla.
