Musk promises $25,000 Tesla

Elon Musk says Tesla is working on a model that will cost just $25,000.

Roberto Baldwin from Car and Driver reported:

• Elon Musk and Tesla powertrain and energy engineering leader Drew Baglino held the Tesla 2020 Battery Day announcements as an outdoor presentation, with the audience sitting in Tesla cars and honking horns to show approval.

• Musk described a much more efficient way of making batteries on a much larger scale that will cut the cost per kilowatt-hour in half, while also talking up a new method of designing the cars so the battery is part of the structure.

• Musk promised a “compelling” $25,000 car within three years and also said he believes internal-combustion cars will soon go the way of the steam engine.

The Wall Street Journal’s Tim Higgins and Heather Somerville wrote:

The electric-car maker’s chief executive said Tuesday he was targeting eventual annual production of 20 million vehicles, or almost twice as many as Volkswagen AG VOW 2.14% sold last year as the world’s bestselling individual auto company.

The ambitious production figure, given at a presentation to investors near the company’s Fremont, Calif., assembly plant, came without a precise timeline or budget. It is the kind of shoot-for-the moon goal that has previously excited investors to make Tesla the world’s most-valuable car company despite selling just 367,500 vehicles last year.

Tina Bellon, Noel Randewich, and Akanksha Rana from Reuters noted:

Investors slashed $50 billion from Tesla Inc’s TSLA.O market value on Tuesday despite CEO Elon Musk’s promise to cut electric vehicle costs so radically that a $25,000 car that drives itself will be possible, but not for at least three years.

Tesla’s market cap dropped $20 billion in just two hours after trading closed Tuesday, as Musk and other Tesla executives presented their new battery and manufacturing strategies. Shares closed down 5.6% and dropped another 6.9% after hours.