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Tesla to build 25,000-euro car at German plant

tesla model y

Tesla (TSLA.O) plans to build a 25,000-euro ($26,837.50) car at its factory near Berlin, a source with knowledge of the matter said on Monday, in a long-awaited development for the electric vehicle maker which is aiming for mass uptake of its cars.

The source, who declined to be named, did not say when production would begin.

Tesla declined to comment.

Chief Executive Elon Musk visited the plant in Gruenheide on Friday, after attending an artificial intelligence summit in England, and thanked staff for their hard work, a video showed on social media platform X.

At the same meeting, he also informed staff of plans to build the 25,000-euro vehicle there, the source said.

The German plant currently produces the Model Y, Europe’s best-selling EV.

Musk had long planned to make a more affordable electric car, but said in 2022 he had not yet mastered the technology and shelved the plan.

Still, sources told Reuters in September the carmaker was closing in on an innovation that would allow it to die cast nearly all of the underbody of the EV in one piece, a breakthrough that would speed up production and lower costs.

Expanding into the mass market is critical to meeting Tesla’s goal of increasing vehicle deliveries to 20 million by 2030, a ten-fold increase from current capacity.

But a weak economy and high interest rates have hit demand for electric vehicles, prompting Tesla and others to cut prices in recent months in an attempt to boost sales.

Tesla also informed workers on Friday that all staff would receive a 4 per cent pay rise from November onwards, with production workers receiving an additional 2,500 euros per year from February 2024.

($1 = 0.9315 euros)

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