Tesla declares that they will cut in half the manufacturing costs of its next generation of cars

Amador Palacios
3 min readMar 21, 2023

We all know that the president of Tesla ( Elon Musk ) really is a fan of making statements and that those statements do not always end up being fulfilled over time. It has happened before, especially with the autonomous driving system of their cars, which is not really autonomous.

That is why the last statement saying that they are going to reduce the manufacturing costs of their new generation of cars by 50% must be taken with caution.

And today I am commenting on this topic because I think it is very relevant at the current time with electric cars, which are much more expensive than normal gasoline cars, which does little to help many of them sell. If prices were the same as or less than gasoline cars their sales would increase exponentially, and I assume this is what Mr. Musk is after.

Tesla has already exceeded the sale of one million cars a year, and in 2023 it aims to sell 1.8 million cars, to reach 20 million in the year 2030. This is a very ambitious objective since Toyota doesn’t even come to sell 10 million a year, and is the world’s largest manufacturer of cars.

Tesla has a very vertically integrated manufacturing since many parts of the car are made, and especially many batteries and all the software that supports them. And that has its advantages and disadvantages.

For this new generation of cars, Tesla will change the way of producing them, and the assembly line will reduce it to 65% of the current one, and supposedly the cars will also be somewhat smaller to facilitate lower prices.

A real revolution is taking place in the world of electric cars, as everyone knows that the cars of the future will be different from the current ones, and that revolution will become clear in the next 5 to 10 years. Especially when the sale of fossil fuel cars in Europe and many US states is prohibited, which will begin to happen beginning the year 2030.

No one has a crystal ball to “see” the future, but no matter what Mr. Musk says, to me it is the Chinese companies that are in the best position to rise to leadership positions.

Another thing is that Western governments let their car companies that provide so much work for so many people sink. But they have been the ones responsible for having reacted so late to the new technologies of the electric car, since they lived very well and earned a lot of money (and still do) selling their polluting cars.

Soon we will see how the situation of this market that affects us all so much evolves.

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Amador Palacios

I am an electronic engineer with more than 40 years working in industry. I like to reflect on Technological and Social issues