Tesla cars worth 25,000 euros (about $26,838) are planned to be built at a factory in Berlin, Germany, as per a source close to the international EV maker Tesla. According to autos research firm JATO Dynamics, the average retail price of an EV in Europe in the first half of 2023 was over 65,000 euros, compared to just over 31,000 euros in China.

Reports state that this is a long-awaited development for the electric vehicle maker, which is aiming for mass uptake of its cars. The source, who declined to be named, did not say when production would begin. Tesla also declined to comment.

The steep price tag of electric cars - compounded by high interest rates - is one of several factors holding back the uptake of the technology in Europe and the United States, consumer surveys show.

Elon Musk, CEO of Tesla, had long planned to make a more affordable electric car, but said in 2022 he had not yet mastered the technology and shelved the plan. Still, sources told Reuters in September that Tesla was closing in on an innovation that would allow it to die cast nearly all of the underbody of the EV in one piece, a breakthrough that would speed up production and lower costs.

Expanding into the mass market is critical to meeting Tesla's aim of increasing vehicle deliveries to 20 million by 2030, setting it apart from competitors like Volkswagen, who have shied away from setting delivery targets and instead focused their strategies on protecting profit margins in the transition to EVs.