Trying to forecast the future through Elon Musk announcements is a bit like reading any kind of future-prophesying horoscope – you tend to bend and manipulate them until they’re telling you something you want to hear.
Need proof? Look no further than the Cybertruck. Back in 2019, Musk revealed the model, issued the starting price (US$39,990), and suggested a 2021 production date.
The brand didn’t actually confirm the model for Australia, but that didn’t stop heaps of Aussies plonking down cash deposits. How many deposits were received globally is a hard number to nail down, but some estimates have them in the millions.
It’s now late 2022, there is no Cybertruck (though it seems to be getting closer), and in May this year, the reservation button was removed from Tesla’s Australian site (replaced with a “Stay Updated” icon).
So yes, it’s safe to say that Elon’s promises and deadlines don’t always pan out exactly as expected.
But on this one, I believe him. The days of seeing Tesla as some sort of fly-by-night upstart are long over. The brand is a force, both globally and in Australia, and the magic it has achieved in the EV space is scarcely believable.
Last month, the Tesla Model Y was Australia’s best-selling SUV (electric or otherwise) and the country’s third best-selling vehicle overall.
Those numbers are reflected elsewhere around the world, too. A recent Tesla investor presentation predicted the brand would sell around 800,000 examples of the Tesla Model Y by the end of the year – a feat that would make the electric SUV the world’s fifth best-selling car.
The Model 3 is experiencing similar sales success – despite being overtaken by the arrival of the Model Y. So far this year, some 8647 examples of the Model 3 have found homes in Australia, and last month it was Australia’s second-best selling passenger car (made more impressive by its comparatively high entry price).
Remember, too, that Toyota – the big dog of the auto space – is reportedly going back to the drawing board with its own EV plans after misjudging how quickly (or slowly) the transition to electric would take. And the culprit for speeding up the shift? Tesla.
“What’s driving (the) effort is the EV’s faster-than-anticipated takeoff and rapid-fire adoptions of cutting-edge innovations by Tesla and others,” a Toyota source told global news outlet Reuters.
When you’re forcing the world’s biggest automaker to rapidly shift gears because you’re doing it better, and faster, than they are, then the world has no choice but to acknowledge you’re now a car-making force to be reckoned with.
Which is why I’m choosing to take Tesla’s latest promise seriously. Because there’s only one thing left holding it – and most other EV makers – back, and that is the price of the vehicles.
No matter how popular EVs become, there’s only a percentage of the population willing to drop in excess of $60k on a new vehicle, no matter what is powering it. And despite the industry’s promises that EVs would get cheaper and cheaper, and eventually hit price parity with petrol-powered cars, they’ve only gone one way so far – and that way is up.
But Musk says Tesla is working on a new platform that will halve the cost of producing EVs, paving the way for the long-promised entry-level Tesla model in Australia and around the world.
And Musk has big plans for the cut-price Tesla, saying the new affordable model will outsell the Tesla Model 3 and Tesla Model Y combined, and describes the project as “the primary focus of our new vehicle development team”.
The Tesla boss hasn’t attached a launch date to the new model yet, but the plan will give hope to those currently priced out of the EV brand’s lineup.
So how will a new model outsell those two runaway models? On price. According to Musk, the brands’ new platform will underpin the new model, as well as future products. Critically, it’s expected to produce savings as high as 50 per cent in production costs.
A reminder that the cheapest Tesla in Australia is the Model 3 Rear-Wheel-Drive, at $65,500 before on-road costs. If Tesla was to halve production costs, and pass those savings on to consumers, it’s conceivable the new cut-price Tesla could be around the $33,000 mark in Australia – little wonder, then, that the sales expectations are so high.
“We don’t know the exact dates, but this is the primary focus of our new vehicle development team,” Musk said.
The presumption, then, is that Musk is finally green-lighting the long-hyped US$25,000 ($39,064) Tesla, first flagged way back in 2020.
“We are confident that long-term we can design and manufacture a $25,000 electric vehicle that will be compelling,” Musk said at his Battery Day event that year.
“This has always been the dream since the beginning of the company. Our first car was an expensive sports car, then a slightly less expensive sedan, and then finally a mass-market premium vehicle.
“But it was always our goal to make an affordable electric car. And we’re confident that in around three years from, now we’ll be able to make a very compelling US$25,000 electric car that’s also fully autonomous.”
The plans faltered earlier this year, when Musk said the company has too much on its plate to focus on a cut-price model, but seem to be right back on track now.
Interestingly, back in 2020 he suggested it would take three years to develop the affordable Tesla. And that window is now fast approaching.
The race to an affordable EV that people actually want to drive (yes, there will be other cheap EVs, some potentially sooner than the one we’re talking about here, but they’re unlikely to be anywhere near as appealing as one wearing a Tesla badge) is now the most important, and lucrative, in the electric-vehicle world.
And having already revolutionised (a term I don’t use lightly) the take-up of electric vehicles in Australia and around the world, Tesla now wants to make them cheaper.
And given the importance of that goal, I believe them. And yes, you can hold me to that.
Keyword: Tesla WILL launch Australia's cheapest electric car in the Model 2 - you heard it here first | Opinion