Tesla plans to introduce a $30,000 electric vehicle by 2017

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Tesla makes some of the coolest cars on the market, but for many people the $70,000 Model S is too expensive to justify buying. Thankfully it looks like the company is also working on a cheaper Model E that might not come at such a high price. The electric car-maker is currently developing the Model E while also putting the finishing touches on its Model X SUV, which is set to hit the market next year. In an interview with Autocar, Tesla VP of engineering Chris Porritt revealed that the E will be priced to compete with Audi’s A4 sedan and BMW’s compact 3 series, which both cost a little over $30,000 new. The planned lower price is mostly thanks to Tesla’s Gigafactory, which should significantly lower the cost of manufacturing batteries.

Owning a Tesla is a tempting proposition. The cars are marketed as zero emission and recharging your battery is free at Superchargers, so over the long term it’s a very cheap car to run. The one barrier to entry? The high cost of buying one in the first place. The Tesla Model S costs $70,000. Tesla isn’t standing still when it comes to making its cars more affordable, though, and intends to introduce a Model E compact saloon for just $30,000. There’s still a while to wait before the Model E arrives, with late 2016-early 2017 being the time frame for its introduction, but it’s coming and it’s all thanks to Tesla’s Gigafactory. One of the reasons the Tesla S is so expensive is the cost of manufacturing the batteries it ships with. If battery production costs can be reduced significantly, so can the cost of the vehicles. With that in mind, Tesla is planning to build a Gigafactory for lithium-ion battery production in one of four proposed US states. That factory is set to be fully operational by 2020 and will have a maximum capacity of enough batteries a year for 500,000 Tesla vehicles. At $30,000 the Model E is aiming to compete with the Audi A4 and BMW 3- series. By 2017 the Tesla recharging network across the US will be well-established and therefore posing a serious problem for Tesla’s competitors. If the Model E is priced the same as an A4 and 3-series, and yet comes with no, or at least greatly reduced ongoing fuel costs, how do you compete?

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