Tesla to build $25K autonomous EV

Tesla plans to release an all-new $US25,000 ($A34,000) electric vehicle in about three years based on breakthrough battery-related technology and accompanying cost reductions it has detailed today.

Not only did Tesla boss Elon Musk promise the $25,000 EV, he said it would be fully autonomous.

On both counts, such a car would be a ground-breaker as EVs are notoriously expensive because of their battery packs and Level 4 or 5 autonomy remains a distant prospect according to most automotive industry timelines.

In response, the company’s share price actually dipped as the market judged the waiting time for the car too long, perhaps remembering frequently missed Musk-nominated deadlines in the past.

The price of the new model, which does not yet have a name but is in line to be branded as the Tesla Model 2, is an outcome of a 56 per cent reduction in dollar cost per kilowatt hour claimed at Tesla’s much-anticipated Battery Day presentation in California this morning (AEST).

Some researchers estimate that price parity, or the point at which electric vehicles are equal in value to internal combustion cars, is reached when battery packs cost $US100 ($A140) per kilowatt hour (kWh).

Tesla’s battery packs cost $US156 per kWh last year, according to electric vehicle consulting firm Cairn Energy Research Advisors.

Tesla also claimed a 54 per cent improvement in vehicle range as a result of its various technology improvements.

“We are confident long term we can design and manufacture a compelling $25,000 electric vehicle,” Musk said.

“It really is our goal to make an affordable electric car and I think probably in about three years we are confident we can make a very compelling $25,000 electric vehicle that is also fully autonomous.”

Moments after that Musk also reclaimed outright production car performance and range bragging rights from the recently released Lucid Air, providing first details of the Tesla Model S Plaid powertrain.

Not available for delivery until late 2021, Tesla confirmed the Plaid would deliver a 9.0sec quarter-mile (402m) sprint, a 520-mile-plus (836km) range, 0-60mph (96km/h) in less than two seconds and a 200mph (322km/h) top speed.

That compares to the Lucid Air’s 517mph (832km) range, 2.5sec 0-60mph and 9.9sec quarter-mile. Mind you, a tri-motor Lucid Air GT is coming in 2021, so it should be game on again in the insane EV performance stakes.

But Musk wasn’t just focused on the next year or two, casually dropping at one point his desire for Tesla to eventually build 20 million vehicles per year.

In 2020, 80 million new vehicles are expected to be sold globally.

On stage at the Fremont plant in front of an audience sitting in their Teslas tooting their approval, Musk and powertrain chief Drew Baglino detailed a new 4860 cylindrical battery cell designed by Tesla that will replace the current 2170 cell.

The first two numbers in the battery name refer to its diameter and the last two its length in millimetres.

The 4860 offers six times the power of Tesla’s previous cells and five times the energy capacity. To cure thermal issues a bigger cell creates, Tesla has created the first ‘tabless’ cylindrical cell form factor, or shape.

But Musk and Baglino also went through improvements in manufacturing process, anode materials, cathode materials and integration of the cell into Tesla vehicle designs to come up with the cost reduction and range improvement claims.

The 4860 battery contributed 14 per cent to the cost reduction and 16 per cent to range improvement. Manufacturing improvements contributed 18 per cent to cost reduction; the anode material eight per cent to cost and 20 per cent to range; cathode material 13 per cent and four per cent respectively; and integration seven per cent and 14 per cent.

Musk forecast the improvements would start flowing through in the next 18 months and be fully realised in three years.

In a tweet prior to Battery Day he indicated the forthcoming Tesla Semi, Tesla Cybertruck and Tesla Roadster would all benefit from the new tech.

He revealed an ambitious plan to dramatically ramp up Tesla battery production over the next few years to three terawatt hours – or 3000 gigawatt hours – at several highly automated plants and reduce the amount of cobalt used by those batteries to almost zero.

Tesla currently produces batteries in partnership with Japan’s Panasonic at its Nevada Gigafactory, while South Korea’s LG Chem and China’s CATL supply cells to its Shanghai factory.

Tesla is also building its own cell manufacturing facility at its new factory in Germany and has established a new cell assembly line at Fremont.

More immediately and very relevant for the $25,000 ‘Model 2’, Musk also promised a fundamental overhaul of the controversial Autopilot semi-autonomous driving system would reach “full self-driving” private Beta phase within one month.

“It’s amazing, it’s clearly going to work,” he declared during his wrap-up for stockholders.

“It’s a hell of a step-change.”

Musk explained Autopilot had been stuck in a “local maximum a couple of years ago”, prompting a fundamental rewrite of the Autopilot software stack.

Previously Tesla had been labelling single camera images but new technology was now allowing entire 3D video segments to be labelled at once.