Tesla drives the cost per EV even further

01/31/2025 07:04 AM

Tesla has further reduced its cost per electric vehicle (EV) as it prepares to produce the new Model Y.

“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,” said Tesla’s Chief Financial Officer, Vaibhav Taneja.

Three years ago, Tesla’s former Head of Investor Relations, Martin Viecha, shared that Tesla cost $84,000 to produce each car in 2017. By 2024, Tesla reduced that number to around $36,000 per vehicle.

Taneja hinted that reducing Tesla’s cost per vehicle was not easy. He explained that Tesla’s cost per car decreased despite increased depreciation. He also noted that some costs increased as Tesla prepared to produce the new Model Y.

“All our factories will start producing the new Model Y next month. While we feel confident in our team’s 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,” noted Tesla’s CFO.

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