We always hear news about how technology helps the electric vehicle market with new models and innovations with every single passing year. It makes me chuckle every time I hear about how a foreseen important model is the $25K electric car. There has always been someone who has an idea of how an electric vehicle could be made extremely affordable and how it could completely change deep-rooted perceptions people have about electric cars. Recently however, It seems like Tesla is the one who has chosen to drop this project for the time being. In light of this, what do you suppose the EV market and affordable electric cars would be like in the coming days?
This is precisely what we are going to be focusing next, stretch Tesla’s decision to cancel the model on the $25K to what it would mean for people who expect EV cars to be lower in price.
What Was the $25K Tesla Car?
The ‘budget model’ as it is sometimes known, was a deliberate attempt for the company to rethink its position as Musk predicted a model that will cost $25,000 and sell the car way cheaper than the Model 3 and Model Y. Every company has a certain model that is designed to bring in large revenue, known as a ‘mass market’ model. That model is supposed to be an electrical vehicle that will help the middle class partake in the electrification of cars.
A Tesla for a ‘non-Tesla’ price thrilled a lot of potential buyers. The $25K model would still capture the Tesla ethos in terms of its design, as well as the technology it features, and come at a price that is well lower than the current offerings.
Why Did Tesla Discontinue the $25K Car?
Tesla had lots of reasons to stop developing the $25,000 car. Manufacturing difficulties, financial limitations, and changes of focus within the company, these were all the reasons to stop creating the car.
- Rising Costs of Materials
The main reason stopping the Tesla from making the $25K car is the expenses associated with the raw materials. Along with other electric vehicle batteries, the price of lithium and cobalt have increased tremendously which makes it hard to maintain such low prices and profitability. This is the reason why Tesla is struggling to create such a low priced car, devoid of quality and performance issues. - Complex Manufacturing Process
We all know Tesla is know for his manufacturing process but the new model promises challenges. It is an exhausting job for a car company to deliver Tesla’s standards regarding the performance, cost, technology and safety. They probably realized that in order to sell a car for 25k, they need to, more than likely, customize the entire Tesla approach to manufacturing. - Shift in Company Priorities
Tesla is no longer making the $25K car because their focus has changed. Tesla has been concentrating on the more expensive models like the Cybertruck, Model S, and Model X. Tesla has also focused on revolutionizing self-driving cars and extending battery-life technology. These innovations probably overshadowed the goal of building a cheap electric car.
4. Competition and Market Demand
For every innovative electric vehicle yet to be released, competitors are also hitting the market which has led to car makers such as Ford, Chevrolet, and Volkswagen to produce their own electric vehicle alternatives like the Ford Mustang Mach-E, and Chevrolet Bolt which may have lessened the demand for the Tesla priced at $25,000. The demand for Tesla could be the reason why they decided to focus more on growth.
What Does This Mean for the Future of Affordable EVs?
I get how Tesla’s decision to cancel the $25K car might seem disappointing for electric vehicles at that price point. Still, it does not mean it’s the end for affordable electric vehicles. Dispending such a vehicle might come with a few benefits.
- Increased Focus on Existing Models
Tesla might concentrate on further optimizing some of their current offerings like the Model 3 and the Model Y as these models offer some of the most competitively priced luxury electric vehicles and with some more economical manufacturing methods or battery technology breakthroughs, Tesla could make them even more affordable. - Rising Competition in the EV Market
Automakers are starting to enter the EV market and are trying to offer cars at low prices too. Electric cars like the Chevrolet Bolt, Nissan Leaf, and some others are on the cheaper side. There seems to be growing competition, so maybe the prices for electric cars will continue to go down. - Innovation in EV Battery Technology
The reason why electric vehicles are expensive is because of the battery which is also the most expensive component in the car. Companies such as Tesla are pouring the money into battery technology and hoping to decrease price while increasing efficiency. Tesla knows that the price of electric vehicles is going to decrease as battery technology is going to improve. Companies are ready to invest in the technology because they want to meet the new demand for the cheaper electric vehicles. - Greater Accessibility for the Mass Market
Tesla may have abandoned the idea of a ‘$25K car,’ but it still focuses on making EVs more widely available. As manufacturing processes evolve and battery technologies improve, a more affordable future may well be in the cards.
What Are the Alternatives for Consumers?
Although the dream of owning a Tesla for 25k might shattered, there are still numerous alternatives for buyers looking to spend less on an ev.
- Tesla Model 3
Tesla Model 3 is still one of the more cheaper options for a Tesla, going for 40k. Although it is not anywhere close to the 25k mark, the Model 3 is one Tesla’s top contenders in the ev market. It performs, has strong range, and is overall a great mile of cutting edge technology.
- Chevrolet Bolt EV
Chevrolet Bolt is one of the most affordable electric cars on the market, starting at $26,000. With the practical range and additional features, this car is perfect for users wanting to save money while still receiving value.
- Nissan Leaf
Another vehicle that is popular for it’s price range starting at 28k is the Nissan Leaf. It has been in the market for silencens years and works effortlessly for it’s users.
- Ford Mustang Mach-E
If you are one looking for a more sporty vehicle, the Ford Mustang Mach-E will fulfill that requirement. It’s more pricey starting at $39,000. The Mach-E is simple to drive and gives the driver a great ev experience.
Why did Tesla decide to remove the car that costs $25K?
The $25K vehicle that Tesla designed has been canceled because of the increased costs of the raw materials such as lithium and cobalt as well as the complicated mass production costs. Tesla decided to shift their focus to other innovations, such as their advanced models and battery technology.
Will Tesla still release affordable electric cars?
Although the $25K vehicle is no longer available, Tesla is still committed towards making electric cars cheaper. They might improve existing models such as the Model 3 or potentially develop new ways of manufacturung that, along with innovations in battery technology, can result in cheaper vehicles.
What are the other cars that one can buy other than the 25K Tesla vehicle?
If you are in the market for reasonably priced electric cars, the available alternatives Tesla are the Chevrolet Bolt EV, the Nissan Leaf, and the Ford Mustang Mach E. These vehicles give great value, having starting prices that are low in comparison to other EV’s in the market.
Conclusion
Many people are upset about how Tesla decided to drop their standalone $25,000 car, but it doesn’t mean they are giving up on trying to make EVs cheaper. Tesla will likely keep trying to invent new forms of EVs, and the outlook isn’t going to change. It doesn’t matter who will make them, Tesla or some other brand; competitive pressure and new technology will ensure there are cheaper EVs in no time.
Till then, customers still have several options to choose from, as long as they are willing to spend a bit more. The Tesla Model 3, Chevrolet Bolt, and Nissan Leaf are going to ensure that taking a bite out of the EV pie is going to be easier than ever before.
