Tesla Shares Rose 1.90% on Rumours of a Cheap German EV Car

The Tesla Inc (NASDAQ: TSLA) share price rose 1.90% after rumours emerged from sources close to the EV leader that the company intends to start manufacturing a 25,000-euro ($26,838) car at its German factory near Berlin. 

Most Tesla fans have been waiting for the EV giant to announce a cheaper car that can appeal to the mass market, allowing it to compete effectively with legacy automakers such as Toyota and Volkswagen. 

EV industry experts and analysts have long pointed out that the high prices of most EVs compounded by high interest rates have made it harder for customers to buy EVs, hindering the mass adoption of EVs. 

In the first half of 2023, the average retail price of an electric vehicle (EV) in Europe soared to over 65,000 euros, as reported by automotive research firm JATO Dynamics. This figure is in stark contrast to the average EV price in China, which stood at just over 31,000 euros during the same period.

Elon Musk had previously expressed intentions to create a more affordable electric car. Still, in 2022, he admitted that the technology necessary for such a vehicle had yet to be mastered, leading to the shelving of the plan. 

However, sources revealed to Reuters in September that Tesla was making progress on an innovation that could enable the die-casting of nearly the entire underbody of an EV in a single piece. Such a breakthrough would expedite production and also reduce manufacturing costs.

For Tesla, expanding into the mass market is pivotal in achieving its goal of delivering 20 million vehicles by 2030. 

Recently, Tesla CEO Elon Musk visited the Gruenheide plant in Germany and thanked the workforce for their dedication. During the same meeting, Musk revealed plans to manufacture a 25,000-euro vehicle at the German facility, a significant step toward affordability.

Currently, the Gruenheide plant produces the Model Y, the best-selling electric vehicle in Europe. Tesla plans to expand annual production at the plant to reach 1 million cars. However, the company has not updated its production figures since March, when it produced 5,000 cars weekly at the facility, translating to 250,000 EVs annually.  

Tesla share price. 

The Tesla share price was trading up 1.90% at $224.15 from Friday’s closing price of $219.96.