Volkswagen and Tesla Vie to Make the Cheapest Electric Car

Elon Musk never can stay out of the news for long. Recently he made the announcement that his electric car company Tesla will soon produce electric cars for $25,000. The new cars are coming in the next three years and will use the company’s innovative new battery cell.

Why is this significant? We have all the details.

An affordable Tesla?

In the beginning, Tesla’s CEO claimed that the automaker wasn’t likely to produce an electric vehicle for over $35,000. At the time, according to, Musk was thinking that with the rise of self-driving ride shares, fleets of electric vehicles would greatly cut down the cost of travel. He expected that the cost reduction would cover the lower part of the transportation spectrum. 

It didn’t exactly work out that way. Yet. Tesla is known for producing innovative, high-performing electric vehicles. Are they known for affordability? Not so much.

As it has for all of us, the last year has Musk thinking a little differently. Recently, at the Tesla Battery Day presentation, he announced that Tesla would soon produce a more affordable electric car. And that’s good considering the lowest price you can get on a standard-range Tesla currently is just over $36,000 according to MotorTrend.

The proposed smaller electric hatchback will be manufactured in China. As Tesla recently clarified, it will cost about $25,000 and will be completely self-driving. Musk made a point of explaining that the entire endeavor was possible because of Tesla’s new battery cell and battery manufacturing venture. 

No other specifications were revealed in the announcement but according to, Musk has indicated before that the vehicle would have a 200-mile range.

Volkswagen wants in

Tesla isn’t the only electric car producer in town anymore. More electric cars are available on the market each year. Volkswagen’s ears perked up about affordable electric cars according to In November, it threw its hat into the ring.

With two market leaders proposing the production of electric vehicles in a $25,000 to $30,000 range, they’ll be accessible to a wider group of consumers. The cost of electric cars has always been a big drawback for buyers. Thanks to advancing battery technology, automakers are able to achieve better performance and longer ranges. Throw lower prices on top of that? Bonus.

In November, Reuters reported that VW greenlit the production of a new “small BEV” program to create electric vehicles that would start around $24,000 to $30,000. This follows the release of their new ID.3 electric car which starts somewhere around $34,000. It’s not available in the states. There was no time estimate given on the release of the VW vehicle.

Why this is a win for electric cars


What Does Tesla Do With Old Batteries?

The timeline suggested by Tesla would have vehicles arriving around 2024 or 2025. VW might just stick to that timeline too to be competitive. By then the market might be shifting even more toward hybrids and all-electric vehicles based on the progress we’ve seen over the last few years.

There are certainly cheaper gas-powered vehicles available. When it comes to the cost of owning a vehicle over 10 years, new, affordable electric cars coming will be competitive. They should also have a pretty good resale value. Environmental concerns will also prompt people to consider an electric car for their next vehicle.

With other incentives like environmental awareness, tax credits, and an ever-growing public network of charging stations, the popularity of electric cars will only grow as prices go down.

The debut of more affordable electric cars from two top brands like Tesla and VW, not to mention the reservation process, is bound to drum quite a bit of excitement. Affordable offerings from such appealing brands will be a big draw. Who will do it better? Tesla or VW? It remains to be seen.