Tesla to manufacture affordable 25,000-euro car in Germany – exclusive report

CEO Musk Announces Plan for 25,000-Euro Car at Berlin Factory

Tesla is set to build a 25,000-euro ($26,838) car at its Berlin factory, according to a source with insider knowledge. The electric vehicle manufacturer has long sought to make its cars more affordable, with the hope of increasing mass adoption. Although the exact production start date has not been revealed, this development is highly anticipated in the industry.

The price of electric vehicles remains a key barrier to widespread adoption, particularly in Europe and the United States where interest rates are high. Recent consumer surveys have shown that the average retail price of an EV in Europe during the first half of 2023 was over 65,000 euros, compared to just over 31,000 euros in China.

In the past, Tesla CEO Elon Musk admitted that he had yet to master the necessary technology for a more affordable electric car. However, sources indicated earlier this year that the company was making progress on an innovation that would significantly reduce production costs. This breakthrough involves die casting the underbody of the EV in one piece, which would expedite production.

Expanding into the mass market is crucial for Tesla to achieve its goal of delivering 20 million vehicles by 2030. This sets the company apart from competitors like Volkswagen, who have focused on protecting profit margins during the transition to EVs rather than setting delivery targets.

Factory Visit and Pay Rise

On a recent visit to the Berlin factory, CEO Elon Musk expressed his gratitude to the staff for their dedication. During the same meeting, he revealed plans to produce the 25,000-euro car at the facility. Currently, the German plant manufactures the popular Model Y, Europe’s best-selling EV. Tesla intends to double the factory’s capacity to produce one million vehicles per year.

Since March, when the company reported producing 5,000 vehicles per week (equivalent to around 250,000 annually), it has not provided any updates on production numbers. Local authorities have requested further information from Tesla regarding its expansion plans to ensure compliance with nature conservation laws.

In a positive move for employees, Tesla announced a 4% pay rise for all staff starting in November. Additionally, production workers will receive an additional 2,500 euros per year starting in February 2024, resulting in an 18% pay increase over the next 18 months. In 2022, German union IG Metall highlighted that Tesla wages were approximately 20% lower compared to other carmakers covered by collective bargaining agreements.

Source: Reuters

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