An upcoming book by Elon Musk’s biographer will detail Tesla’s long and bumpy road to the development of a $25,000 mass-market electric vehicle. The road to Tesla’s affordable mass market EV has been a bumpy one, autobiographer Walter Isaacson says, and Musk often put roadblocks ahead of his own plan.
In a recent interview with Axios, Isaacson revealed that Musk vetoed his own plan for an affordable electric car repeatedly in favor of robo taxis. It was only when Tesla executives who weren’t as enthusiastic about robo taxis convinced Musk to hedge his bets on both affordable EVs and robo taxis that the CEO agreed to develop both side by side, Isaacson says.
Titled “Elon Musk,” the forthcoming autobiography will reveal how executives persuaded Elon Musk to develop a $25,000 electric car alongside robo taxis. If Tesla can successfully develop and sell an affordable EV for the mass market, the Texas-based EV maker will solve a major issue plaguing electric adoption across the world: high EV prices.
Even with government assistance such as tax credits, a large portion of the public simply cannot afford to purchase an EV. The average electric vehicle is out of the price range of most drivers, a factor that has significantly hampered EV adoption and could prevent the U.S. from achieving its electrification and carbon emission goals if it isn’t addressed.
According to Tesla’s master plan, the EV maker would use the funds raised from expensive offerings such as the Model S and the Plus-Roadster to make future models more affordable. However, with the Model 3 debuting in 2017 at $52,000 rather than the promised $35,000, Tesla has not produced an “affordable” family car in recent years. More affordable electric cars will be key to increasing EV adoption in the near future, especially since many drivers report that price is one of the few factors keeping them from purchasing EVs.
Elon Musk, on the other hand, has grown increasingly fascinated with robo taxis equipped with self-driving capabilities, saying in 2019 that Tesla owners could earn an extra $30,000 annually by using their EVs to offer driverless rides or run errands. The billionaire has even said that he believes robo taxis could eventually eliminate the need for personal cars, Isaacson said. Musk told the writer that there was no ceiling on the number of robo taxis Tesla could develop and that he wants the automaker to build as many as 20 million robo taxis annually.
As Tesla mulls designing a $25,000 mass market EV, other players such as Nikola Corporation (NASDAQ: NKLA) may need to rethink their strategies in order to grab and retain market share for their own electric vehicle models.
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