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Elon Musk says ‘affordability’ is key obstacle to Tesla reaching mass market © AP

Tesla executives have touted a range of efficiency and cost improvements that they say have put the company on track to introduce a more affordable electric vehicle, allowing it to tap a huge new market as it faces more competition from rival automakers.

At Tesla’s first investor day at its Gigafactory in Texas on Wednesday, it advanced what it calls the “next-generation platform” for the affordable vehicle.

Lars Morawi, head of automotive engineering, said the “large-scale” vehicle will be produced at several of the company’s plants, including a new facility in Mexico, unveiled by the country’s president earlier this week and confirmed by Tesla on Wednesday.

Tesla CEO Elon Musk says “affordability” is the main barrier to reaching a much larger market. “We’re not sure what Tesla’s price elasticity of demand is,” he said, before recent price cuts for its electric vehicles.

“We’ve found that even small changes in price have a big impact on demand — very big,” Musk added.

In the first apparent confirmation that a round of price cuts helped restore demand after a weak start to the year, Tesla’s head of China operations, Tom Zhu, said lower prices there had an immediate impact, with the company increasing its market share. Country.

“Later [the price cuts] We created a bigger demand than we could actually produce,” said Zhu, who took charge of Tesla’s production facilities around the world earlier this year.

Read more about Tesla’s Investor Day here.

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