Tesla working on third, sub-$30,000 car

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Tesla working on third, sub-$30,000 car

Tesla working on third, sub-$30,000 car

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The world-famous Tesla Roadster - check out our recent test here - has been known for some time to have a sedan sibling in the works, codenamed 'Whitestar'. But now Tesla's chairman of the board, Elon Musk, is talking about the third car to bear the Tesla name, and it's targeting a sub-$30,000 price tag.

It's still in the early stages - Musk and the company haven't even decided if they'll build it themselves or in partnership with a larger carmaker - but some of the rough details indicate it could be Tesla's first real volume seller. The Roadster is only expected to turn out about 1,800 examples per year, while the Whitestar sedan will run nearer to 20,000 in total output after it starts sales in late 2010, but those are still tiny numbers in terms of the overall market.

By aiming for a sub-$30,000 price point, Tesla is clearly intending to build a car for the masses, which means production figures to match. Musk's interview with Newsweek indicates the third model could be targeting annual production figures of about 200,000 units, based on his theory of volume versus cost.

"[W]hen you increase the production quantity by a factor of 10, you can reduce the price by a factor of two. In the early 20th century, cars were initially something for wealthy people. It took quite some time for the cost to be optimized and become accessible to a broader population. It's the same thing here—we'll see the traditional technology learning curve," said Musk.
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