Tesla, the electric vehicle (EV) giant, is set to make a significant impact on the automotive industry with its plan to produce a 25,000 euro electric car at its factory near Berlin. Sources familiar with the matter revealed this groundbreaking development on Monday, sending Tesla’s shares surging by 3% in pre-market trading in the United States.
At the time of this publication, Tesla Inc stock (TSLA) has witnessed a surge.
Tesla Inc
Current Price: $220.63
Change : +0.67
Change (%): (0.30%)
Volume: 52.6M
Source: Tomorrow Events Market Data
The high cost of electric vehicles has long been a major hurdle to their mass adoption, both in Europe and the United States. Recent consumer surveys have illuminated the stark disparities in EV pricing. In the first half of 2023, the average retail price of an EV in Europe exceeded a daunting 65,000 euros, compared to the more affordable 31,000 euros price tag in China.
Tesla’s CEO, the enigmatic Elon Musk, has consistently expressed his ambition to offer a more affordable electric car. This goal was initially put on hold in 2022 due to technological limitations. However, sources have reported significant progress in September, suggesting that Tesla is edging closer to a breakthrough that will allow for the die casting of nearly the entire underbody of the electric car in one piece. This innovation promises to expedite production and lower costs significantly.
Tesla’s state-of-the-art German factory, located near Berlin, is currently responsible for producing the Model Y, Europe’s best-selling electric vehicle. While officials have stated that the factory’s capacity could potentially be doubled to 1 million vehicles per year, no update has been provided regarding production levels since March. At that time, it was disclosed that the factory was producing around 250,000 vehicles annually.
Local authorities have voiced their concerns about how Tesla’s expansion plans align with nature conservation laws, and they are now poised to make a decision on whether to grant approval.
In addition to the exciting news about the mass-market electric car, Tesla employees received word of a 4% annual wage increase set to take effect in November. Production workers, in particular, are slated to receive an additional 2,500 euros per year starting in February 2024, marking an impressive 18% pay increase within just a year and a half. Notably, Tesla’s wages had previously fallen below the standards set by union IG Metall’s collective bargaining agreement, trailing by 20% from the average industry rate.
Tesla’s entry into the mass market with an affordable electric car is poised to revolutionize the electric vehicle industry. A more accessible price point combined with increased production capacity paves the way for a rapid adoption of EVs. This announcement underscores Tesla’s commitment to driving the transition to sustainable transportation and lowering the barriers that have held back widespread EV adoption.
Source: Reuters
