Tesla has further reduced its production costs per electric vehicle (EV) as it gears up to manufacture the updated Model Y, Chief Financial Officer Vaibhav Taneja said.
“Our journey on cost reduction continues, and we were able to get our overall cost per car down below $35,000, driven primarily by material costs,” Taneja stated.
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The company has significantly cut production expenses over the years. In 2017, it cost Tesla around $84,000 to produce a single vehicle. By 2024, that figure had dropped to approximately $36,000, marking a substantial decline, according to Martin Viecha, Teslaâs former Head of Investor Relations.
Taneja acknowledged that reducing costs further had been challenging, particularly as the company prepared to roll out the new Model Y. “All our factories will start producing the new Model Y next month,” he said. “While we feel confident in our teamâs abilities to ramp production quickly, note that it is an unprecedented change, and we are not aware of anybody else taking the best-selling car on the planet and updating all factories at the same time.”
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Tesla has been focused on improving production efficiency and lowering material costs as it navigates a competitive EV market. The company has not disclosed specific details about the upcoming Model Y updates but has signaled that the transition will impact costs in the short term.
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