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Tesla and Volkswagen to compete with new affordable electric cars at ~$25,000 to $30,000

The electric car market is about to be accessible to a lot more people as we’ve now learned that Tesla and Volkswagen, the two market leaders for electric vehicles, have now both greenlit electric car programs that are going to start at ~$25,000 to $30,000.

In surveys about going electric, the price of new electric cars is always one of the top concerns of new buyers.

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 starting to enable automakers to reach higher performance, specifically longer ranges, at a lower price point in electric vehicles – opening EV ownership to more people.

Now two major electric automakers have announced compelling electric vehicle programs that should start between ~$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:

There’s no word on when VW plans to bring to market the new cheaper electric car.

Electrek’s Take

I wouldn’t be surprised if they aim to bring it to market on a similar timeline as Tesla’s new cheaper electric car.

Right now, I would expect these vehicles to come in 2024-2025, which is also when I believe there’s going to be a massive market demand shift 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 massive demand shift where the vast majority of new car buyers are going to understand that their next vehicle has to be electric.

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

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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