Is the Era of Half-Price Tesla Electric Cars Coming? "Low-Cost New Car Factory in India"

Expectations for a 'half-price electric car' are rising again following news that Tesla is pushing to build a low-cost new car factory in India.

On the 24th (local time), major foreign media outlets cited sources reporting that Tesla plans to meet with Piyush Goyal, India's Minister of Commerce and Industry, later this month to discuss building a factory to produce a new car priced at $24,000 (about 30 million won) in India. According to sources, Tesla has expressed its intention to the Indian government to produce low-cost electric vehicles for local sales and exports.

In related discussions, Tesla reportedly stated that the price of the new car to be produced in India would be around 2 million rupees in local currency. This is about 25% cheaper than the lowest price of the Model 3 currently sold by Tesla in China, which is approximately $32,200 (about 41 million won). In the United States, the Tesla Model 3 starts at just over $40,000 (about 51 million won).

Earlier, Tesla CEO Elon Musk met with Indian Prime Minister Narendra Modi during his visit to the United States last month to discuss investment plans in India.

Since early this year, Tesla has increased sales by reducing prices of existing models by 10-20%, but experts point out that to improve profitability in the long term, Tesla needs to launch affordable new cars with significantly lower production costs. Tesla currently produces vehicles at factories in California and Texas in the U.S., as well as in Germany and China overseas.

Elon Musk, CEO of Tesla. [Photo by Yonhap News]

As analyses suggest that Tesla's 'new car strategy,' which has been the key driver of its high growth and stock price direction, is reaching its limits, market attention is focused on whether the company will proceed with the half-price electric car factory.

At the Battery Day event in September 2020, Musk declared, "We will release a $25,000 electric car by 2023." However, at the Investor Day event this February, where Tesla unveiled its long-term business blueprint for the first time in seven years, it did not specifically disclose plans or financial targets for future new cars such as the half-price electric vehicle. Instead, it set a goal to reduce the assembly cost of next-generation vehicles to 'half' of the current level, but the market response was lukewarm.

At the event, Lars Moravy, Tesla's Vice President of Vehicle Engineering, stated, "We expect the next-generation model to have assembly costs that are half of the current Model 3 or Model Y." This means reducing costs by simplifying assembly processes and shortening production time. However, concerns have resurfaced in the market that Tesla is significantly lagging behind competitors like General Motors (GM), Ford, and Volkswagen, who are leading the low-cost electric vehicle market.

This report came as Tesla's stock price surged more than 118% this year (based on the closing price on the day), largely recovering the losses from last year. Investor sentiment was boosted by news that competitors in the electric vehicle market have agreed to use Tesla's electric vehicle charging system, leading to a record-breaking 13 consecutive days of gains last month.

This content was produced with the assistance of AI translation services.