Elon Musk Promises to Make a $25,000 Tesla (in 3 Years)

Tesla is working on cheaper, more powerful batteries for its electric cars, but many of the required innovations are still works in progress, its chief executive, Elon Musk, said Tuesday at a much anticipated presentation at the company’s California factory.

The advances could ultimately cut battery costs more than 50 percent and increase the distance Tesla’s vehicles can travel by nearly as much. That would set the stage for the company to make a “compelling” $25,000 electric vehicle three years from now, Mr. Musk said, speaking to a parking lot full of Tesla owners in their vehicles, honking in approval.

But Mr. Musk, who has a reputation for promising game-changing innovations that often take far longer than expected or never arrive, said the company had not yet made the advances needed to get to that point.

Investors were hoping that Mr. Musk would announce a major technical breakthrough, in part because of the way Tesla had pitched the Tuesday event, which it called “Battery Day.” Tesla’s stock was down about 7 percent in extended trading Tuesday afternoon after falling more than 5 percent in regular trading.

As anticipation for the presentation built in recent days, Mr. Musk sought to temper expectations, writing on Twitter on Monday that the battery announcement would affect long-term production of Tesla’s vehicles, including several that have yet to be introduced, but would not have an immediate effect on its business.

He also said that despite pushing the battery cell suppliers Panasonic, LG and CATL to move “at maximum speed,” Tesla expected battery shortages starting in 2022.

The company is piloting production of batteries at its car factory in Fremont, Calif., and plans to build a cathode production plant somewhere in North America, Mr. Musk and Drew Baglino, senior vice president of powertrain and energy engineering, said at the event.

“It just really bodes well for the future, and it means that the long-term scaling of Tesla and the sustainable energy products we make will be massively increased,” Mr. Musk said.

Lucid claims that its Air sedan can travel farther on a charge because of advances the company has made in shrinking critical parts like motors, and making other improvements, including in how it cools critical components. G.M. has developed modular battery packs and improved battery chemistry that it believes will drive down the cost and increase the range of its electric cars over the next several years.

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