Tesla developing smaller, cheaper EV platform

CEO Elon Musk has revealed plans for Tesla's next generation of electric vehicles that will be smaller and more affordable.

On a conference call Tuesday after Tesla's third-quarter earnings release, Musk said the company is working on a next-generation platform designed for vehicles smaller than the current Model 3 and Model Y crossovers. [At this point, the engineering for the Cyber Truck and Semi is done. 'So clearly what we're working on is a next-generation vehicle that will probably be about half the cost of the 3 and Y platforms. It will be much smaller, to be clear."

Musk also predicted that production of vehicles on the new platform will exceed that of Tesla's other lineups combined.

"But I think it will certainly exceed the production of all our other vehicles combined," he said. In other words, we're going to incorporate everything we've learned from the S, X, 3, Y, Cybertruck, and Semi into that platform."

Musk did not elaborate on how Tesla plans to cut costs, but he said he has a goal of reducing the "effort" required to build EVs on the next-generation platform to half that required for the Model 3 and Model Y. As for the cost of future EVs, Musk said that in 2020, Tesla could reduce costs through a combination of further improvements in the production process and cheaper battery chemistry, which could bring the cost of EVs down to $25,000.

Prior to the 2018 launch, Musk said the Model 3 would start at $35,000; a $35,000 Model 3 was offered in 2019, but Tesla withdrew from sales after only a few months.