Why is Tesla so expensive? — ILMM

I recently saw a photo on Instagram with a little boy sitting in Tesla and his dad saying “By the time you are 18 I’ll save up enough money to buy a Tesla. This 16-year old Tesla”. The starting price of model S is more than £61,000. How can a car be so incredibly expensive?

Tesla Model S is the first luxury electric car being in production since 2012. Despite the sky-high prices, the demand for it only seems to be rising up. Tesla is also highly supported by the green energy movement — electric batteries produce much smaller amounts of CO2 than gas-powered engines (despite what most of us think, small CO2 emissions are still present when an electric car is being charged).

The main reason for Tesla being so unbelievably expensive is the battery, which constitutes around 40% of the total car price. The company is currently working on the ways of increasing the efficiency of the engine and thus, lowering its price, which will hopefully decrease the overall cost of the batteries by a third or more.

The next task on the top of the list for Tesla is to create a mass-produced electric car for a lower price. The question is — how can they lower the price, and thus the cost of production, without cutting out all the high-tech features everyone loves? Well, for one, they are working on the battery efficiency that will hopefully get the price down, which we have just mentioned above. We’ll see if they succeed in a few years. Tesla is hoping to decrease the price down to $30,000 (compared to $70,000 for an S now) and release a cheaper version in 2017. Initially being called a model E, which falls perfectly into the range of S and X, the name was later changed to model 3. Trying to differentiate between luxury and mass-market I suppose.

Image © raneko