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Tesla's $25,000 Electric Car In 3 Years Thanks To Cut In Battery Costs

tesla sept23 lt

Electric car maker Tesla is planning to reduce battery production costs by more than half, which would result in a $25,000, fully-autonomous car in about three years' time.

While talking at the Battery Day 2020 event, Tesla Chief Executive Elon Musk outlined the technology that is expected to make Tesla batteries, the most important and most expensive part of an electric vehicle, cheaper and more powerful. With this, the company expects to speed up a global shift to renewable energy.

Musk, along with other executives, detailed new larger cylindrical battery design, material and production innovations which together is expected to cut the cost per kilowatt hours by 56 percent. The new batteries will offer five times more energy, six times more power and 16 percent increase in driving range.

During a presentation at the event, in front of 240 shareholders, Musk said that there is desperate need of new approaches for making lithium-ion batteries for vehicles due to the limited supply and cost.

The three-hour event, a show-and-tell session following its annual meeting, was livecast from a site at Tesla's assembly plant in Fremont, California.

A $25,000 model Tesla car will be much cheaper than current models that starts at a bit more than $35,000.

The executives also revealed a number of new product programs that will be launched over the next many years.

Tesla, which usually buy battery cells from partners Panasonic, LG and China-based CATL, is currently developing its own battery cells.

On the previous day of the Battery day, Musk had tweeted that its own battery cells would not reach high-volume production until 2022, and that it intends to raise battery cell purchases from cell partners including Panasonic.

Despite the maximum offer from its cell suppliers, Tesla said it still expects significant shortages in 2022 and beyond unless certain actions are taken by the company itself.

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