Model 3 / Y too popular, less willing to push cheaper models in the near future

Martin Viecha, head of investor relations at Tesla, was invited to a technology conference held by Goldman Sachs on Monday, local time, to present Tesla's growth plan for the next five years to the investors present.

Wichita focused on the fact that the cost of manufacturing each electric car will continue to decline. He began by addressing two big themes that will be critical to Tesla and the electric car industry as a whole over the next five years: battery supply and technology, and the cost of building cars.

He said that car manufacturing will eventually grow as fast as the battery industry. This will affect the manufacture of batteries and battery packs, as well as battery design, lithium, nickel and the mining and refining of other raw materials.

"The third revolution in automotive manufacturing."

The cost of manufacturing each electric vehicle is the most important metric to monitor in the coming years, Wicha stressed. Ultimately, he said, this will be how many vehicles car companies can produce and how large they can grow.

In 2017, Tesla's average cost per electric vehicle was $84,000. In recent quarters, the cost per vehicle has dropped to $36,000. Almost none of the cost decline is due to lower battery costs. Instead, Tesla has benefited from better car design and an updated factory design that makes it easier and easier to build cars.

Tesla's first car manufacturing plant is in Fremont, California, near Silicon Valley, not a good place to build a car, Vichar added. He said factories in places like Shanghai, China, and Berlin, Germany, are cheaper to manufacture.

Tesla hopes the cost of manufacturing each electric car will continue to fall.

The Fremont, California, plant accounts for about half of Tesla's total vehicle production. As the new factory produces more electric cars, the production cost per vehicle will be less than $36,000, which will help improve the company's profitability, Vichar said.