Will there finally be a cheap electric car from Tesla? We put in order everything that is known today

Tesla’s cheap car, also commonly referred to as the Model 2, has been the epicenter of news, leaks, and rumors for years. North American company reference book for electric vehicles. And, as Elon Musk has assured in famous master plans, he is creating increasingly affordable cars with high production volumes. However, to fulfill its mission it is necessary to take one more step forward.

Currently, Tesla Model 3 sells in Spain for almost 40,000 euros. This figure falls below €35,000 when various government assistance is taken into account (MOVES III plan, tax relief on tax returns, etc.). When you take into account the price-quality ratio and compare it with the rest of the models on the market, the Tesla car certainly represents a very interesting proposition. But despite this, for many it remains an unattainable means of transportation.

To fully embrace the masses, Tesla needs a model that goes a little further. Especially when you take into account the significant growth and ambitious expansion plans of Chinese brands that are gradually emerging in regions such as Europe with very complete cars and, in some cases, quite affordable prices – like the MG4 -.

This is exactly the scenario that Tesla’s low-cost car, also known as the Model 2, will fall into. Information on this matter was varied and in some cases even contradictory.. Fortunately, after Tesla’s latest call with investors, things seem to be starting to become clearer.

But wasn’t Tesla’s cheap car – or Model 2 – cancelled?

Before we get to the latest information, let’s go back a few months. At the end of 2023, Walter Isaacson’s biography of Elon Musk confirmed that the company was planning two new cars: autonomous robotaxi and another inexpensive, but widespread production. Both will be built on a new platform.

In January 2024, during a routine call with investors following the presentation of quarterly results Elon Musk assured that the company is indeed working on a completely new model, and revealed several details. the same. Its production will begin in the second half of 2025 at a plant in Texas (Nevada), although in the future it will also take place at a giant plant planned in Mexico, as well as a third location outside North America. . definite.

However, in April both Reuters How ElectrekTwo consolidated media outlets in the sector have indicated that Tesla, according to close sources, has canceled development of the aforementioned low-cost electric car – or Tesla Model 2 -.

Reuters, in particular, anonymously mentioned several Tesla employees in his article. They stated that The new guidance was to focus on autonomous robotaxis and move away from the low-cost vehicle, also known as the Model 2.. Information that Musk hastened to refute a few minutes later on his profile on X (Twitter). Shortly after this, the tycoon also announced that the robotaxi presentation would take place on August 8th.

Days later Electrek confirmed the information published Reuters. According to sources consulted by the above-mentioned media, Tesla has canceled all work related to the project and even interrupted the expansion of its gigafactory in Nevada, created in late 2023 as a priority for this year. This was necessary to carry out production of Tesla’s expected low-cost electric car, which will use the new platform.

In parallel, Musk has cited expanding the aforementioned gigafactory south as a new priority.. It will house a giant data center that will give life to the company’s robotaxis. The project, which, according to ElectrekThe delay is already accumulating.

Such information were not received by investors, who see the launch of a cheaper model as vital to Tesla’s long-term growth. Especially given the growth of Chinese companies in this sector.

What did they say when talking to investors?

In the last call with investors, given the current pressure, the company shed some light on this issue. And in a sense, this confirmed the information published by both Reuters concerning Electrek. Here’s what he said on the last slide of his presentation:

We have updated our future vehicle lineup to accelerate the launch of new models ahead of our previously announced production start in the second half of 2025.

These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms and will be able to be produced on the same production lines as our current lineup of vehicles.

This modernization may result in smaller cost savings than previously expected, but will allow us to increase vehicle production volumes in a more capital-efficient manner during periods of uncertainty. This will help us fully utilize our current peak capacity of around three million vehicles, allowing us to increase production by more than 50% compared to 2023, before investing in new production lines.

Our custom-designed robotaxi product will continue to utilize our revolutionary unpacked manufacturing strategy.

Tesla Investor Presentation

Tesla, therefore, Yes, he will release cheaper models than the current ones., but not as expected. The original plan was to create an entirely new platform and deploy it across multiple gigafactories. This, thanks to numerous innovations, will reduce production costs and bring more affordable cars to the market. Of course: solving such work requires serious investments, both financial and time.

Yes, there will be a cheaper Tesla, but not as much as we expected

In such situation Tesla has decided to implement several improvements developed for the new platform on its current production lines.. This, as they explain well, will not allow them to reduce costs as much as originally thought, so the $25,000 range that was planned for the Tesla Model 2 seems impossible at the moment.

However, Yes, it would be reasonable to expect some of the new cars to cost between $30,000 and $35,000 before government assistance.. The current Model 3, to set a benchmark, costs around $39,000 in the US.

However, this approach leaves two big questions up in the air:

• Will these models be updated versions of the current Model 3 and Model Y, additional variants, or new product lines? In other words, will some sort of Model 3 Lite come to market, will the current Model 3 simply be updated with a lower price as a result of the aforementioned improvements, or will we see a Model 2?
• And in this regard: In what aspects will lower production costs be noticeable? Cheaper than batteries? Less powerful engines? More efficient production processes?

What is known at this time is that the company’s intention is to start production of new models at the end of 2024 or beginning of 2025. A year earlier and with less investment than originally planned.