Elon Musk announces a $25,000 Tesla is in the works and details all the new battery technology the company is developing

• Tesla’s delayed shareholder meeting and “Battery Day” kicked off on Tuesday afternoon outside the company’s Fremont, California, factory.
• Following a short formal portion of the meeting, CEO Elon Musk gave a review of the company’s progress over the past year with heavy emphasis on software and manufacturing. 
• Musk touted new battery improvements that could make manufacturing cheaper and provide more power.
• He also announced a yet-to-be-named future Tesla car that will be priced at $25,000 and a $140,000 “Plaid” version of its Model S.
• Visit Business Insider’s homepage for more stories.

Elon Musk and other Tesla executives held an unusual outdoor version of the company’s annual shareholder meeting and a “Battery Day” presentation on Tuesday afternoon in Fremont, California.

Among the touted advancements in power technology and manufacturing, Musk announced a yet-to-be-named $25,000 Tesla car was in the works thanks to the cost savings in battery production that will touch all of the company’s products.

A $140,000 “Plaid” edition of the Tesla Model S was also announced, with preorders open now.

An unusual setting amid pandemic restrictions

The delayed event had severe attendance restrictions in place because of the COVID-19 pandemic. A few randomly selected shareholder attendees watched the proceedings from long rows of parked Tesla cars. Those attending the event responded with honks instead of applause.

Tesla’s vice president of legal, Al Prescott, presided over the business portion of the annual meeting. Investors voted on seven proposals, including the election of three directors, executive compensation, and the ratification of its outside accounting auditor. Four other proposals, including one about Tesla’s forced-arbitration policies, are not expected to pass and were opposed by the company’s board of directors.

The formal stockholders meeting was quickly followed by a year in review by Musk. He touted Tesla’s sales growth this year as it scaled up a new factory in China, as well as new improvements to Autopilot, its driver-assistance software. 

A beta version of the software’s “full self-driving” capabilities will be released soon, Musk said. “It took us quite a while” to rewrite the entire code base, he said, adding, “It’s awesome.” 

Musk also touted improvements to Tesla’s manufacturing ability, a theme he’s said previously is underappreciated by many people: “The difficultly of designing the machine that makes the machine is vastly harder than the machine itself,” he said.

Shares of Tesla sank about 4% to about $408 in after-hours trading during the event after previously declining 5% in trading on Tuesday.

The main event: Updates on Tesla’s battery technology 

Tesla’s highly anticipated Battery Day presentation kicked off about 2:40 p.m. local time, with Drew Baglino, the senior vice president of power train and energy engineering, joining Musk on stage. 

“The three parts of a sustainable-energy future are sustainable-energy generation, storage, and electric vehicles,” Musk said. “So we intend to play a significant role in all three.”

But to get there, the world needs to produce 10 terawatt-hours’ worth of energy per year, Musk said. That’s 100 times more than Tesla’s current production level. 

“Today’s batteries can’t scale fast enough. They’re just too small,” Musk said. For electric cars to continue their growth against their gas-powered counterparts, they’ll need to continue to get cheaper, he added. That’s where Tesla’s plan to halve the cost of producing every kilowatt-hour with continuous cylindrical cells, as opposed to those with tabs, comes in.

The new battery architecture can result in 5X more energy, a 16% range increase, with 6X the power output, Musk said, noting that production is already beginning at a pilot plant. At the same time, costs can be reduced. 

“It will take about a year to reach the 10 gigawatt hour capacity,” he said, with help coming from a recent acquisition. The next goal is to improve manufacturing processes to the point where assembly lines are continuously moving.

By 2030, when all the innovations are complete, Tesla says it will be able to produce three terra-watt hours of energy every year. 

On the chemistry front, Tesla said it’s acquired a 10,000-acre mining site to produce even more of battery components in-house. “There really is enough lithium in Nevada alone too electrify the entire US fleet,” Baglino said. 

And when it comes time to put the batteries in cars, Tesla has built a massive new casting machine in order to integrate the battery’s components with the car itself, much like a plane’s fuel tanks are integrated into the wing instead of separate parts. This lowers overall mass and number of parts while improving the car’s structural integrity, Musk said. 

A $25,000 car is in the works

When all is said and done, Tesla says the improvements in battery chemistry and manufacturing will help it sell a car for $25,000. 

“About three years from now, we’re confident we can make a very compelling $25,000 electric vehicle that’s also fully autonomous,” Musk said. For years, he’s discussed bringing down the cost of electric vehicles as a way to decrease the world’s carbon output, and the milestone would reflect a massive achievement on Tesla’s part.

Musk said the $25,000 car has yet to be given an official name. 

Model S ‘Plaid’

Elon Musk touted a ‘Plaid’ version of its Model S car during the event. The $140,000, 1100-horsepower behemoth will have the “quickest 0-60 mph and quarter-mile acceleration of any production car ever,” and recently clocked 1:30.3 at Laguna Seca raceway. Pre-orders are already open on Tesla’s website. 

Additional reporting by Isabella Jibilian, Barbara Smith, and Evan Sully.

Watch a replay of the event below: