Auto Expert Says Hyundai Will Lose Over $10B Trying To Compete With $25K Tesla

One of the bigger surprises from Tesla Inc's TSLA battery day was the announcement of a $25,000 Tesla within three years.

While little details were given, it was enough to excite fans and send a warning to the competition.

Lee Hang-gu, a senior researcher at the Korea Automotive Technology Institute, said this will create headaches for other auto manufacturers. 

“Hyundai Motor will lose 12 trillion won ($10.2 billion USD) if domestic car makers cut production costs by 30% to 40% to compete with Tesla,” he said.

The average price of domestic Korean EVs is around $38,900-$41,600, according to Korean Biz Wire. 

Tesla's $25,000 vehicle is expected within three years, and the earliest Hang-gu sees competitors reaching a similar price is in four to five years — and that's if they give up profits to reach that level. 

Benzinga's Take: We knew Tesla was dramatically pushing down battery prices, but the focus has mainly been on the pain it will bring to gasoline-powered competition.

Not only would a $25,000 Tesla be much more competitive with gas cars, it would cost significantly less over the lifetime of ownership.

It now seems that even battery-powered competitors will have a tough time competing with Tesla — until they can make battery breakthroughs for themselves. 

Photo from Tesla's battery day presentation.