Berlin factory producing affordable cars? Indian factory in sight? Good news from Tesla!

Two good news from Tesla have excited investors.

According to media reports on Monday, Tesla is developing an affordable electric car with a price tag of only 25,000 euros (approximately 195,000 yuan) at its Berlin factory in Germany. This news boosted Tesla's stock price by nearly 3% during overnight trading.

In another latest report, the Indian government is making every effort to attract Tesla to enter the Indian market and hopes to complete the approval process for the Tesla project before January 2024.

Affordable electric cars are coming!

According to media reports on Monday, Tesla is developing an affordable electric car with a price tag of only 25,000 euros (approximately 195,000 yuan) at its Berlin factory in Germany.

According to the report, the price of this affordable electric car is much lower than the average price of electric cars in Europe. According to data from automotive research company JATO Dynamics, the average price of electric cars in Europe in the first half of 2023 reached 65,000 euros. The sharp rise in car loan interest rates and the high prices of cars have suppressed the demand for electric cars.

Last Thursday, an account called "Berlin Super Factory News" on the X platform (formerly Twitter) first revealed the upcoming 25,000 euro electric car.

The electric car blog InsideEVs stated that Musk visited the Berlin Super Factory last Friday and introduced the new affordable car to the employees. However, the blog stated, "We are trying to find more confirmation of this report, but apparently, this speech was limited to employees and there is no video."

Musk has always planned to launch a more affordable electric car.

As early as 2018, he stated that it would take 3 years to develop a low-cost electric car model, but also admitted that it was "very difficult" to develop such a car considering the economic situation and competitive environment of the automotive industry. By 2020, Musk postponed the timetable for the affordable electric car by 3 years.

Looking back at Musk's previous goal, by 2030, Tesla's global electric vehicle deliveries will increase to 20 million units. However, in 2022, Tesla only delivered 1.31 million units, which is still far from this ambitious goal.

Therefore, Tesla needs a cheaper car to attract more customers in the fiercely competitive electric car market. Currently, Tesla's cheapest car in Germany is the Model 3, with a starting price of 42,990 euros.

It is worth mentioning that this affordable electric car may be Musk's key move to strike at competitors in the price war, directly using low prices to consolidate Tesla's dominant position in the electric car market. Since the end of last year, Tesla has started a price war in the global electric car market, catching many competitors off guard. It seems that Tesla is still in a favorable position in this war.

Indian Factory on the Horizon?

Back in Asia, there are reports in the media that the Indian government hopes to provide all necessary approvals for Tesla by January 2024.

According to the reports, the Prime Minister's Office held a meeting with senior officials on Monday to discuss the next phase of development in the domestic electric vehicle manufacturing industry, including Tesla's investment plans. Insiders revealed to the media:

Although the meeting agenda focused on general policy matters, expediting the approval process for Tesla's proposed investment by January 2024 was highlighted.

Since Elon Musk met with Indian Prime Minister Modi during his visit to the United States in June, various departments, including commerce, industry, electronics, and information technology, have been discussing Tesla's plans in India. It is worth noting that India has invited US President Biden to be the chief guest at the Republic Day celebrations on January 26.

Tesla executives have discussed plans with the Indian government to establish car and battery manufacturing facilities in India. The company has expressed interest in bringing its supply chain ecosystem to India.

An official stated that Tesla has requested the Indian government to resolve the differences between the two parties and announce Tesla's manufacturing plans in India as soon as possible.

Considering that Tesla wants to first sell cars in India before establishing a factory, high tariffs have always been a key point of contention between Tesla and the Indian government.

Previously, Tesla requested the Indian government to reduce the import duty on fully assembled cars to 40%. Currently, the import duty for cars below $40,000 is 60%, and for cars above $40,000, it is 100%.

India's tariff system does not differentiate between electric vehicles and fuel-powered vehicles, and high tariffs are imposed to protect the local automobile manufacturing industry. Tesla also requested that Tesla electric vehicles be classified as luxury cars in India.