Tesla to Build Low-Cost EV in Germany

­Honda and GM might’ve punted on their low-cost EV project, but Tesla is stepping in to fill the void.

According to a Reuters report, Tesla plans to build a $27K EV, their first budget vehicle, at their Gigafactory in Germany, near Berlin.

This is very welcome news, since – even with the global bid for electrification – consumers still face a degree of sticker shock with most EVs.

Of course, it usually evens out – EVs are generally cheaper to maintain than their gas-powered cousins (notwithstanding catastrophic battery issues), but not everyone can afford that larger upfront investment.

For example, the Hyundai Kona runs $22,595, while the Hyundai Kona Electric is about $35,295.

As far as Tesla goes, their cheapest offering, the Model 3, starts at around $39K. Tesla’s hypothetical budget model would land just south of $27K, and as it happens, this is pretty far from a new idea.

Back in 2020, Elon Musk said that “In three years . . . we can do a $25,000 car that will be basically on par (with), maybe slightly better than, a comparable gasoline car.”

Tesla's $5.5 billion Gigafactory Berlin currently produces Tesla’s best-seller, the Model Y.

And this new inexpensive EV, potentially called the Model 2, could help Tesla hit their prescribed 50% compound annual growth rate, and the company could cut costs by building the new EV on the same platform as the robotaxi.

The company didn’t give any indication when it would start production on its new EV.