Tesla CEO Elon Musk informed investors on Wednesday, January 24, that a more affordable variant of the electric vehicle (EV) would be released later this year. If Musk's ambitious schedule holds, it may reach Tesla in time to counter the rising influence of Chinese EV manufacturers.

A recent biography of Musk written by Walter Isaacson hinted at a $25,000 entry-level electric car, which might be the "next generation" compact vehicle that Musk indicated, as reported by Axios.

Musk did not mention the pricing of future vehicles during Wednesday's call. Yet, suppose Tesla manages to meet its production goal for 2025. In that case, the EV has the potential to become the most affordable option for consumers in the United States market, competing with inexpensive EVs supplied by international rivals.

At the moment, the starting price of a Tesla Model 3 is $35,100. Musk did not disclose the new model's release date.

Also Read: Elon Musk Seeks 25% Voting Power at Tesla Before Pursuing AI and Robotics

Competitive Price War on a Global Scale

One major obstacle to the widespread use of EVs is their high price tag. As long as borrowing rates remain high, consumers are putting price considerations first when making purchases, according to a new worldwide poll by the consulting firm Deloitte. This is particularly true in the US, Japan, and Germany.

The upfront cost of an EV is more than that of a gas-powered vehicle, but the overall cost of ownership might be less due to savings on fuel and maintenance. According to Wired, car research group Kelley Blue Book said the typical US car--including all drivetrain technologies--cost $48,800 last December, while an EV costs $50,800.

Since Musk's firm is in a worldwide pricing war with other automakers who are putting all their eggs in the EV basket, finding a solution to reduce EV prices is also crucial to them.

While Tesla led the pack in terms of yearly deliveries, the Chinese manufacturer BYD delivered more EVs in the autumn. A Chinese industry association said that last year, the country's automobile exports more than doubled, with over 4 million cars being transported outside.

The US is unable to take advantage of lower-priced Chinese-made automobiles due to protectionist trade policies. However, in order to escape the most severe tariffs, some car companies, including BYD, are allegedly contemplating moving production to Mexico, per a CNN report.

Musk showed his admiration for his competitors in today's investor call. When asked about the level of competition in the global auto industry, he said that Chinese automakers were at the top.

"If there are not trade barriers established, they will pretty much demolish all other car companies in the world. They're extremely good," he stated.

Also Read: Warren Buffett-Backed BYD Beats Volkswagen as China's Biggest Carmaker