Just in Time to stabilize the U.S. EV market? Tesla Finally Has Plans For a $25,000 Car

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Tesla may be about to do what its investors have begged it to do: New reports say that the EV company will launch a $25,000 car. That would allow it to effectively compete with the Chinese and offer a price point in the U.S. that could restart slow sales.

“During the investor meeting with Deutsche Bank attended by Tesla’s Head of Investor Relations, Travis Axelrod,” GlobalChinaEV reports, “Tesla announced formal plans to launch a new vehicle called ‘Model Q’ in the first half of next year. Post-subsidy, the Model Q will be priced at less than 30,000 USD (c. 218,000 CNY) and potentially as low as 25,000 USD (c. 181,000 CNY) for the U.S. market.”

One of the huge hurdles to EV adoption in the U.S. is price. An average new EV carries an MSRP of about $54,000, which is $10,000 above the average gas powered car. With gas at less than $3 per gallon nationwide, the incentive to move to EVs for fuel cost savings begins to drop.

Ford and GM also on the case
Meanwhile, the rest of the U.S. car industry is racing to build and market $25,000 EVs, with both Ford and GM saying they will have them in the market in two years. The situation It is unlike in China, where EV companies make a number of sub-$25,000 EVs. At present they are held at bay in the U.S. by high tariffs.

The EV industry also needs to offset the fact that the $7,500 tax credit may be dropped by the Trump administration.

Has Tesla achieved the American EV industry’s Holy Grail. Heaven knows.