Tesla is the real EV leader: production costs cut by half in recent years

The head of investor relations for Tesla, an American manufacturer of electric automobiles, has disclosed how much cheaper it is for the company to create its vehicles.

Martin Viejo, who was a speaker at a technology conference that was held in San Francisco last week and was organized by Goldman Sachs, stated that the production costs per vehicle will be the most important factor in determining how many vehicles a brand will be able to produce and how large the company will be.

In particular, Vijeja said that Tesla spent an average of $84,000 to construct each of its vehicles in 2017, but that cost has since decreased to just $36,000 each vehicle. This represents a significant decrease.

In addition to this, he stated that nearly none of these cost reductions were the result of lower battery prices, but rather an improved vehicle design that made manufacturing simpler.

To be fair, it should be stressed that Tesla did not begin production of the considerably more affordable Model 3 until 2017 (before to that, the company was only producing the more costly Model S and Model X), and that the second more affordable car, the Model Y, is “out.” only in the year 2020.

Although factories in Berlin and Shanghai are becoming increasingly crucial for Tesla, around half of the company’s current vehicles are produced at Tesla’s Fremont, California plant.

Vijeha also mentioned that as the facilities raise their production rate, they will be able to make automobiles for an average price that is lower than $36,000 per unit.

According to Business Insider, Tesla’s CEO stated that the electric vehicle industry will grow as fast as battery supply and will cause changes in the mining and refining of raw materials as well as the design and construction of battery cells and battery packs. This statement was made in response to a question regarding how quickly the electric vehicle industry will grow.

Vijeja acknowledged that the automaker needs to put into production a cheaper electric vehicle, especially if it wants to realize its aspirations for robot taxis. The majority of Tesla’s current sales are comprised of the Model 3 and the Model Y, but Vijeja noted that Tesla needs to produce a cheaper EV.

He went on to say that because there is such a high demand for the Model 3 and the Model Y, Tesla is not in a hurry to release a new model that is priced lower.

He predicts that by 2023, the Model Y will have become the automobile that has had the most sales of any kind, at any point in history, anywhere in the world.