Tesla Wants to Cut Battery Costs in Half

While it won’t revolutionize electric car batteries, Tesla announced on Tuesday a series of technical upgrades that will make it possible to cut production costs in half and sell EVs from just $25,000 USD.

Tesla CEO Elon Musk is confident the company can achieve those goals, but that didn’t seem to convince Wall Street. The automaker’s share tumbled 7 percent as Musk forecast the change could take three years or more.

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Tesla is making significant progress with cell and cathode design, manufacturing processes, the use of silicon and various metals, plus technology integration in cars. Ultimately, the cost of producing batteries could be reduced by as much as 56 percent.

“We don’t have really affordable EVs yet, but we’ll get there,” Musk told the media during Battery Day, a special presentation that followed a virtual meeting of Tesla shareholders.

With increasing competition from mainstream car makers on one hand, and startups like Lucid Motors and Rivian on the other hand, the pressure is on.