Tesla has announced a new battery it says will increase range by 16 per cent, along with plans for a new entry-level model.
- shares

Tesla's much-hyped Battery Day has indeed delivered a new type of battery cell, which the company says will provide a 16 per cent increase in range.

Theoretically, this means a Tesla Model S could offer a range of up to 750 kilometres on a single charge.

The new Tesla battery, named the 4680 for its dimensions (46mm by 80mm), reportedly provides five times the energy and six times the power of previous comparable cells.

Just the change in the physical design of the battery alone will provide a 14 per cent saving per kWh, the company claims. The cost saving could lower prices for electric vehicles, making them more competitive with their traditional petrol and diesel counterparts.

During the presentation, founder and CEO Elon Musk told the audience – seated in a car park full of Tesla vehicles – the new cell technology was a big breakthrough in the progression of battery technology.

Musk also explained upcoming battery packs for Tesla models would be structural, meaning weight can be saved as the cells will be integral to the chassis.

Tesla said it is ultimately aiming to reduce the dollar-per-kWh cost of batteries by 50 per cent.

New AU$35,000 Tesla model in the works

Elon Musk also revealed the company is working on a new entry-level model – rumoured to be called the Model 2 – which he says will be priced from US$25,000 (AU$35,000).

This would make the new Tesla roughly the same price as the cheapest automatic Toyota RAV4 currently on sale in Australia.

However, it's possible the vehicle could be more expensive once it reaches our shores, thanks to a number of taxes and tariffs applied to imported new cars.

If past Tesla launches is any indication, it is also likely the most affordable model in the new range will launch later than the more expensive models.

Musk said a name has not been given to the upcoming model yet, but it is expected to be released in around three years and will feature full autonomous driving technology.