Building a third, more affordable vehicle will require Tesla to find the sweet spot in combining battery size, capacity and cost.
The automaker will need to squeeze a 200-mile driving range out of a battery that’s smaller than currently available in the Model S, which has a maximum EPA-rated range of 265 miles.
“That’s pretty ambitious to get there,” Koslowski said. “One hundred to 120 miles of range isn’t enough for mainstream consumers to really feel comfortable.”
A $40,000 car with a 200-mile range would give Tesla a significant competitive advantage, as mainstream automakers probably will not hit those cost and range targets for at least another year or two, Koslowski said.
Also important for Tesla’s success will be its ability to ramp up production to a much higher level. The current Model S is built at Tesla’s Fremont, Calif., plant and uses only about a quarter of the facility’s 5 million square feet of space. This is where the Model X will also be built.