Tesla Model 2: News, Rumored Release Date, Price, and Everything We Know About the $25,000 Electric Car

  • Tesla wants to develop a mass-market electric car to sell in $25,000, but has no release date

  • Production and batteries will be key to reducing the price of the new model

New Tesla Model 2
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Alberto de la Torre

The status of the electric car is unknown. So far, the major manufacturers have opted to fill the market with high-priced models to compensate for the losses of not being able to mass-produce their vehicles but also to reach an audience that can afford these cars.

But with this market already satisfied, it is time to offer lower-priced electric cars. In other words, enter the realm of mass-market electric automobiles. With the Tesla Model Y becoming the world’s best-selling car in 2023 (including internal combustion engines) and the Tesla Model 3 supporting the company’s sales, the next big leap is the $25,000 car.

Here is what we know so far about its arrival, features, and price.

When Will It Be Announced?

Very soon. If we go back in time, we will find that Elon Musk has been talking about the arrival of a compact Tesla, cheaper and around $25,000 since 2020. A car with its own design language adapted to European tastes and manufactured exclusively in Berlin.

At that time, there was no date for the possible arrival of this “presumed” Tesla Model 2. However, shortly after, in 2021, there was talk about it. Elon Musk raised the bar during the company’s Battery Day, one of Tesla’s annual events. He said we would have a compact, $25,000, fully autonomous Tesla in 2023. There was even talk of this car having no steering wheel.

It is 2024, and here we are writing this article. As is obvious, the affordable, autonomous electric car has not arrived, but last year served to fuel some rumors.

In November 2023, Reuters claimed that the roadmap for Tesla’s new electric car is already underway. They pointed out that it will be manufactured in Berlin but did not give an arrival date for this new Tesla electric car. They assure that the company does not have a specific timetable, but its production will be European.

Shortly after, in January 2024, Reuters updated its previous information. The news agency affirms that it has received confirmation from inside the company that the production of this Tesla Model 2 is not expected until mid-2025, and we might not see it on the road until 2026.

What Will the Price Be?

The price is part of the more or less clear information available. From the beginning, the company has assured that it will try to sell its future mass-market electric car for $25,000, considering it the right price to popularize it and compete in the market.

What is not clear is if the company will sell several versions of the same car, placing the entry range at $25,000 and raising the most powerful versions in terms of autonomy and power above this price.

We must not forget that, with the Tesla Model 3, the company followed this strategy during 2023, placing its entry level below the psychological barrier of $40,000 but leaving the most powerful cars, and with greater autonomy above this figure.

What Will its Design Look Like?

Little or nothing has been seen of what is known as the Tesla Model 2. The shape of the company’s new electric car is a mystery, but a few guidelines are hard to change.

During its annual meeting with shareholders, Tesla showed the first official image of the Tesla Model 2. It is the silhouette heading this article, whose shapes will be like those we already know in the Tesla Model 3. Something like a scaled-down or compact version of Elon Musk’s sedan.

Which Autonomy Will It Have?

Another mystery and one of the key aspects to be solved. If Tesla has sold its Tesla Model 3 and Model Y massively, it is because it offers an autonomy/price ratio that is difficult to replicate by other competitors in the industry.

Now, rumors agree that, with a reduced size and an affordable price, we can expect a car with a battery of about 50 kWh, which could lead to about 400 kilometers in the homologation of the WLTP cycle. Tesla, of course, has been characterized by vehicles with contained consumption, so with this size, we could talk about 350 kilometers on the road.

We know that Tesla has been developing new batteries that should surprise in their performance, with remarkable autonomy in a contained size. However, we know that the company is not getting the expected performance and that this may have meant a delay in the development of the vehicle.

What Technologies Will It Use?

Another question to be answered. From the very first announcement, Elon Musk set the bar very high. He talked about robotaxis and a compact, affordable car that would be used primarily in fully autonomous mode. Tesla is still struggling with its autonomous driving systems and U.S. regulators four years later.

And on that very point, Elon Musk told investors not to expect any big surprises with the car: “It’s going to be cool, but utilitarian. Not intended to fill you with wonder and magic, but to get you from A to B,” he emphasized to them.

Let’s keep in mind that Tesla would not be able to offer much more advanced features in its lower-priced car than in its top models. It would be cannibalizing itself, so it would not make much sense that at least all the technology to be implemented in the Tesla Model 2 could not reach the Model 3, Y, S, and X.

However, it seems that the company will continue to rely on software as a fundamental part of its new vehicle. With the latest update of the Tesla Model 3, Elon Musk’s firm has opted to take the minimalism of the interior to a new level, eliminating, for example, the satellite controls of the gearshift or turn signals to put everything on the screen.

In addition, Tesla is investing heavily in the development of its artificial intelligence systems, to simplify its vehicles as much as possible (cameras are now in charge of all autonomous driving systems) and giving control to the software.

How Will the Tesla Model 2 Be Cheaper?

Gradually, Tesla has provided more details in this regard. We know that Elon Musk’s company has based its huge profitability per vehicle sold on mass production through its Giga Press, which allows it to assemble dozens of parts in one and produce much faster.

With the Tesla Model 2, Elon Musk assures that they are ready to reach a production rate never seen before in the industry. In 2023, they showed their intention to minimize production costs, reduce labor, and turn the car into a kind of puzzle composed of large parts assembled at the last minute.

However, Reuters has also revealed that the company, which aims to assemble up to 400 parts in one piece, is having trouble getting this development, which is key to making its vehicles cheaper, off the ground.

It is also known that Tesla has been able to push harder than anyone else in the industry because it has had huge profit margins per car sold. If it can achieve similar numbers with a $25,000 car, it will have a lot to gain and will be able to continue to squeeze the competition.

In addition, Elon Musk has not hesitated to make sure that they have no problem losing some (or all) money on sales because they want to make the software an added value of the product and make money through subscriptions.

Photo | Tesla

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