YOUR NEXT CAR WILL BE A VOLT:

At its heart, the plan is to vertically integrate a large portion of Tesla's battery production, "from mining the ore to the complete battery pack," as Musk put it. That control will allow for design and technology innovations that Musk says will dramatically slash costs for Tesla's cars. Tesla currently works with partners like LG and Panasonic to produce batteries, and it apparently won't end those relationships anytime soon. But it will dramatically expand its own battery production capacity, and, executives said, make those batteries for less than its partners do today.

Based on its various innovations, Tesla projects it can reduce the cost of its batteries by more than half within about three years (though Musk and Baglino didn't reveal much about Tesla's current production costs). The result, if Tesla's projections pan out, could fundamentally reshape the economics of car buying sooner than you think.

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