Yes, Teslas are expensive. Not everyone can afford one. The high price depends on two factors: batteries and Elon’s strategy.
One of the reasons why Teslas are expensive is the price of batteries. Lithium-ion battery-packs don’t come cheap. And Teslas need a lot of them.
To give you an idea; in 2015 the average price per kWh was $373. This means that a 90 kWh battery pack would cost $33,570.
Elon’s master plan
Another reason why Teslas are expensive is because of Elon’s master plan. 15 years ago he wrote a plan for Tesla Motors:
- Create a low volume car, which would necessarily be expensive
- Use that money to develop a medium volume car at a lower price
- Use that money to create an affordable, high volume car
So the first cars didn’t need to be cheap. They needed to prove that electric cars were possible.
Teslas are becoming cheaper
Here’s the good news; Teslas are becoming cheaper because of two reasons:
- Economies of scale. Tesla sells more vehicles than ever before, reducing the price per unit.
- Battery prices. The volume weighted average battery pack fell 85% from 2010-18, reaching an average of $176/kWh (source).