Tesla's Next Car Could Be Significantly Cheaper Than the Model 3

Elon Musk claimed that Tesla is working on a “next-generation vehicle” that will be smaller and cheaper than the Model 3 and Model Y.The comments came during the company’s Q3 earnings call; no specific timeline was given.The aim is to significantly reduce production costs and drastically increase output of this new model, which Musk claims will outsell all other Tesla models combined.

Tesla CEO Elon Musk makes a lot of claims, but his latest assertion is particularly enticing. During the company’s Q3 earnings call and Q&A session, Musk discussed the next big thing on the horizon, a new platform that will spawn a “next-generation vehicle” that will be smaller and significantly cheaper than the current Model 3 and Model Y.

The goals for this new product are ambitious and far-reaching: Musk says the aim is to reduce production costs by around 50 percent compared with the Model 3 and Y and increase output so that this new model could “exceed the production of all our other vehicles combined.” Given that both the Model 3 and Model Y are already among the top 20 bestselling vehicles in the U.S., that’s a stratospherically high sales target.

We can only assume that these reduced production costs will translate to a lower cost for buyers as well, but we’re not sure exactly how low Tesla could go. The Model 3 currently starts at just under $50,000, and a starting price of around $30,000 would put this hypothetical new Tesla in contention with the cheapest new EVs you can buy today.

Musk isn’t talking specifics in terms of timing but asserted that this new platform is the current priority for the development team, as he says, “We’ve done the engineering for Cybertrucks and for Semi.” But neither of those products has hit the market yet, so we’re not holding our breath for the new small, cheap Tesla to arrive anytime soon.

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