Tesla Planning Sub-$30,000 Vehicle For 2016

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2,113 views Aug 24, 2009

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Tesla Motors wants you to know that they won't be a niche automaker for long. CEO, Elon Musk has repeatedly affirmed that he expects his electric vehicle company to compete in the mainstream market with the big boys. With a lineup consisting of two-seat sports cars costing more than $100,000, and limited to 244 miles per charge, the average American can only lust after Musk's creations. That's about to change.

Tesla plans to augment their vehicle roster in a major way over the next six to seven years. Their 7-passenger Model S sport sedan is expected to debut in 2011. After a $7,500 tax credit, the cost of that vehicle will be just under $50,000. The EV maker has also just announced plans for a sub-$30,000 vehicle for 2016.

To put that in perspective, the battery packs for the aforementioned two-seat Tesla Roadster cost $30,000. According to Tesla spokeswoman, Rachel Konrad, battery prices are falling 8 to 10 percent each year. Still, assuming a 10 percent cost reduction annually, the batteries would account for roughly half the price of a $30,000 EV in 2016.

Nevertheless, with $465 million of U.S. Department of Energy loans in the pipeline, Tesla plans to cut costs in other ways. $100 million of the loan money will be used to build a new powertrain facility and corporate headquarters in Palo Alto, California, while the rest is expected to fund an assembly plant for the upcoming Model S.

Bringing more of the manufacturing costs in-house will save money. Whereas Tesla currently contracts with the French company, Sotira, for the Roadster's carbon fiber body panels, new facilities will enable the EV company to make its own aluminum body panels in the U.S. at a lower cost.

As for range anxiety, Tesla will offer the Model S with three battery options. The customer will choose between batteries offering enough energy for 160, 230 or 300 miles of driving. If your family road trip exceeds 300 miles, you may be able to rent a battery with even more capacity.

How this idea will fare with a public accustomed to five minute gas-ups is anybody's guess, but the battery charging breakthrough everyone seeks might be found prior to the release of the common man's Tesla. Then terms like range anxiety and battery swapping would seem silly.

Source: AutoNews