To compete with modern affordable electric cars at $25,000 to $30,000 Tesla and Volkswagen

As we have now heard that Tesla and Volkswagen, the two industry leaders for electric cars, now both have greenlit electric car programs that will launch at ~$25,000 to $30,000, the electric car market is about to be open to a lot more people.

The price of new electric cars is still one of the top issues of new buyers in surveys about going electric.

When it comes to the luxury segments, many electric vehicles have caught up in price and performance with their fossil fuel-powered counterparts.

However, this becomes less true down market with some exceptions.

Improvements in battery technology are now beginning to allow car manufacturers to achieve higher efficiency, specifically longer ranges, in electric vehicles at a lower price point, opening up EV ownership to more people.

Now, two major electric car manufacturers have announced compelling programs for electric cars that should start from $25,000 to $30,000.

In September, Tesla announced that it will make a new smaller long-range electric car with its new battery technology starting at $25,000.

CEO Elon Musk commented in the announcement:

Tesla will make a compelling $25,000 electric vehicle that is also fully autonomous.

Musk also added that the new $25,000 electric car is going to come to market in about three years, when Tesla has ramped up production of its new battery cell.

Now Volkswagen is apparently joining the race down market for new small electric cars.

Reuters reports today that VW has greenlit a new “small BEV” vehicle program that would start at a price of $24,000-30,000:

“Under the project dubbed “Small BEV (Battery Electric Vehicle)”, engineers are racing to develop a purely-battery powered car around the size of a Polo which will be available for between 20,000 and 25,000 euros ($24,000-30,000).”

VW recently launched the ID.3 electric car, which starts closer to the equivalent of $34,000 USD – though it’s not sold in the US.

It closer in size to the VW Golf while the VW Polo is a bit smaller in size:

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Electrek’s Take

If they want to bring it to market on a timeline close to Tesla’s latest cheaper electric car, I would not be shocked.

I would expect these vehicles to arrive right now in 2024-2025, which is also when I think there will be a major change in consumer demand from gas-powered cars to electric vehicles.

While there are gasoline vehicles starting at much cheaper than $25,000, none of them will be competitive on the cost of ownership over a 5- to 10-year period with a compelling $25,000 electric car, especially when you account for the resale value.

This will result in a huge change in demand, where the overwhelming majority of new car buyers will realize that energy needs to be their next vehicle.

Of course, at that stage, in virtually all segments of the car industry, there will already be a lot of very compelling electric options.

While we are still talking about 4 to 5 years away, the unveiling of those two cheaper vehicles from Tesla and VW and the start reservations are going to be important events that I believe will give us a glimpse at that demand shift.

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