Elon Musk makes big claims about Model 3 on Twitter

The body and drive unit of Electric Vehicle (EV)-maker Tesla's Model 3 Sedan can last upto 1 million miles while the battery can last up to 500,000 miles, said company Chief Executive Officer Elon Musk. "Model 3 drive unit and body is designed like a commercial truck for a million mile life. Current battery modules should last 300k to 500k miles (1,500 cycles). Replacing modules (not pack) will only cost $5k to $7k," Musk wrote on Twitter on Saturday.

The billionaire made this claim to his 25.7 million followers in context Model 3's value being used in an autonomous ride-hailing fleet. "What he meant is that the vehicles would become revenue-generating assets as they integrate this autonomous ride-hailing fleet, which has been dubbed the 'Tesla Network'," Electrek reported.

The value of the Model 3 on the Tesla Network would depend on how many miles it can put in it, which according to Musk is up to 1 million miles within two or three battery module replacements. Even though Tesla would not replace a whole battery pack, the company is willing to offer battery module replacements for between $5,000 and $7,000.

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"Assuming that $5,000 to $7,000 for the battery modules means the cost for the Standard Range Plus and Long Range battery modules, it would mean a cost of roughly $100 per kWh at the battery module level, which makes sense," the report added. "At a value of $1 per mile, we are talking about a potential of at least $300,000 in revenue before having to possibly replace the battery modules."

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The EV-maker recently announced big price cuts for its high-end Model S after shifting to online-only sales. The long-range Model S is now priced $83,000 down from $96,000 before savings. The huge price cut by the EV maker comes less than two months after it decided to stop manufacturing Model S with a 75kWh battery pack, opting instead to only sell versions with a 100kWh pack.