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Tesla (TSLA) Stock Price Down over 5%, CEO Elon Musk Announces Cheaper Car Worth $25,000

Tesla Inc (NASDAQ: TSLA) CEO Elon Musk has promised to deliver a cheaper Tesla electric car by 2023. Musk said the vehicle would be available for $25,000, making it the cheapest car the company has produced so far.

On Tuesday, Tesla held its Battery Day event, where CEO Elon Musk promised a cheaper Tesla car with Tesla-made batteries. According to the CEO, the car which would be fully autonomous would be cheaper as it would carry a Tesla-made battery.

During the event, Musk revealed that the company is working on new anode and cathode technology to deliver more affordable and sustainable batteries. Notably, Tesla-made batteries should allow Tesla to manufacture cheaper electric vehicles to its customers.

Musk expressed his confidence in delivering a cheaper car:

“We’re confident we can make a very, very compelling $25,000 electric vehicle that’s fully autonomous. And when you think about the $25,000 price point, you have to consider how much less expensive it is to own an electric vehicle…”

In 2018, Musk promised that Tesla would produce a $25,000 car in three years. Now, the company has extended the delivery of the cheaper car by another three years.

Elon Musk also announced a new Model S Plaid. Ahead of its delivery in 2021, the Plaid is already listed on Tesla’s website at nearly $140,000.

Following Musk’s announcements on Tuesday at the Battery Day event, Tesla’s stock fell 7%. In addition, the company’s market value dropped $20 billion within two hours after trading closed on the same day. At press time, Tesla is valued at $418.75 billion.

According to a Reuters report, investors were looking forward to different announcements from Tesla. They expected an announcement on the development of a “million-mile” battery that can last at least ten years. Investors also expected Tesla to announce a cost reduction that would make an electric vehicle cheaper than a gasoline car. However, CEO Musk gave them none of these.

Ahead of the event, Musk already tweeted that the company’s new plans will not “reach serious high-volume production until 2022.”

The co-founder of Loup Ventures, Gene Munster, suggested that investors are underwhelmed with Musk’s plans. Stating that the three-year Tesla plan is a long time, Munster added:

“Everything they talked about had substance but investors wanted immediately.”

Referring to Tesla’s plan to make its batteries, Munster said that is a “flywheel that is difficult to catch.” However, he added that upon the success of Tesla-made batteries, the company would spend less on production costs, deliver cheaper vehicles and get more demand from consumers.

Currently trading at a premarket price of $401, Tesla stock is down 5.48% over its previous close of $424.23. Also, TSLA fell 1.49% over the past month and nearly 4% in the last five days. In contrast, Tesla stock surged 827.48% over the past year. Similarly, the company has added more than 407% in its year-to-date record. Tesla has also increased by 120.76% in the last three months.

Tesla (TSLA) Stock Price Down over 5%, CEO Elon Musk Announces Cheaper Car Worth $25,000

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