On October 22, Tesla CEO Elon Musk confirmed that after the Model S/X and Model 3/Y, the company will next focus on developing and producing a third small electric car. half that Model 3 or Model Y.
In order to complete the development of the Cybertruck, an electric pick-up truck, and the Semi, a heavy-duty electric truck, Tesla has temporarily discontinued its long-in-demand affordable Tesla models. Now, Tesla is finally starting development and production of its long-promised sub-$30,000 electric car, which may be called the Model 2.
Initially, Musk promised a $25,000 car, but then it was shelved due to inflation and supply chain challenges. During the latest earnings call, Musk revealed that Tesla’s cheapest electric model will be built on an all-new platform and could cost half as much to produce as the Model 3.
Since the Model 3 is currently Tesla’s cheapest model, a new Tesla model would have to start at $25,000 to $30,000 to have a chance of reaching the mass market. “Obviously, we’re going to bring everything we’ve learned from the Model S, the Model X, the Model 3, the Model Y, the Cybertruck, the Semi, to this platform,” Musk suggested.
Musk also added that Tesla would work to halve the cost of producing new models. He cautioned, however, that the so-called Model 2 will be “smaller,” but that it will be the first truly affordable mass-market vehicle in the EV space and could be bigger than “all other Tesla cars with its each other.”
Earlier, Tesla’s head of investor relations, Martin Viecha, made a similar statement in an interview. He said the company’s overarching goal for the next five years is to ensure a continuous supply of batteries (which he believes the company has already achieved), and by moving most of its production to more efficient Gigafactories in Texas or Berlin to reduce manufacturing costs.
However, Tesla will have formidable competitors on the road to popularizing electric vehicles, and not just Volkswagen. Steve Westley, a former member of the Tesla board, said that Tesla’s current main competitor is BYD, which is likely to produce 1 million electric vehicles by the end of the year and is already on the market Introduced the $30,000 Seal sedan with more specifications than the Model 3 .
At the same time, NIO has also started developing low-cost electric vehicles priced under $25,000, while the company and BYD currently sell electric vehicles in Western markets. Honda also plans to launch several electric vehicles priced under $30,000 over the next five years, so Tesla will have to accelerate plans to develop and launch the Model 2 by 2027. As Tesla figures out how to use the new platform to break costs, the market could look completely different.
Musk did not reveal key figures such as the car’s new battery specifications, range, charging power or motor. In addition, unlike in the past, the forecast omitted the timing of when the new platform will be available.
It’s no secret that Tesla cars haven’t gotten cheaper in the last three years. The Model Y now sells for $67,000, and the $35,000 Model 3 is still out of reach. The Model S is 10 years old and only recently upgraded, now starting at $105,000.
While Tesla’s recent price hikes have been blamed on rising raw material costs and pressure from suppliers, industry analysts have also warned that new models slotted below the Model 3 may not have much margin, even if they cost more than $35,000. Like other automakers, Tesla prefers to make luxury versions because more expensive cars have higher margins.
