Enormous progress has already been made on this front.
Electric car batteries currently stand at about $147 per kWh, according to Bloomberg New Energy Finance. That is down from $381 per kWh in 2015 and over $1,000 per kWh in 2010.
But Tesla believes that in order to compete directly on cost with traditional internal combustion engine vehicles it needs to slash this figure to well below $100.
Above all, the launch of its low cost mass market Model 3 car relies on hitting that goal.
If it can’t do so through economies of scale or scientific progress then it may prove tricky to make vehicles at the expected $35,000 price tag without big sacrifices in performance.
For Tesla, which on Tuesday shed $80bn in value – an eye-watering figure that exceeds the combined value of General Motors and Ford – the announcement comes at a critical time.
Many see Tesla’s soaring valuation this year – achieved in the teeth of a global pandemic – as an enigma.
Sure, the company produces a great consumer product and has exciting plans for the future. But its share price long ago lost any kind of correlation with the usual metrics applied to value companies, such as price/earnings ratios or profits.
That makes it hard to understand or justify.
Before the latest plunge began, Tesla shares had soared 500pc this year to a peak of $464bn in late August. Only six other US companies have exceeded that, including Apple, Microsoft and Amazon – whose revenues are more than 10 times higher.