Tesla cuts battery cost on road to $25K model

Tesla on Tuesday said it is slashing battery costs to speed a global shift to renewable energy and could have a $25,000 self-driving model available in three years or so. Chief executive Elon Musk and the head of Tesla’s power team laid out battery design, material, and product innovations that combine to cut the cost per kilowatt-hours by 56 percent.

New approaches to making lithium-ion batteries for vehicles are desperately needed given the limited supply and cost, Musk said during a “Battery Day” presentation. Musk had put out the word on Twitter that Battery Day announcements would be “insane,” driving high expectations.

Innovations, some still in development, were expected to pack more energy into battery cells, cut production costs, and dramatically extend battery life. Tesla makes batteries at its plants in the US and China and is building a factory in Germany. Tesla is already ahead of other automakers when it comes to batteries, the key to the future of electric vehicles.