How Tesla’s Future Low-Price ‘$25,000’ Model 2 May Be Shaping Up

Tesla’s future affordable car appears to be far from dead.

CEO Elon Musk made this clear during first quarter earnings conference call. To recap, during the call he discussed future low-cost cars — albeit briefly — specifying that the new “affordable” vehicles are based on aspects of both the next-generation platform and current platforms. And that Tesla will “accelerate the launch of new models” to “early 2025 if not late this year.” The models “are not contingent on any new factory or massive new production line.” (More here.) Like any carmaker, Tesla modifies its plans to adjust to the vagaries of the market and to swings in profitability. And that’s what the company appears to be doing now.

Former board member on Model 2: Former Tesla board member and founder and managing partner of the Westly Group Steve Westly made comments this past week about the importance of the Model 2, a moniker given to the low-cost car sometimes also dubbed the “$25,000” Tesla. “They’re in a strong position. They have a cost advantage on batteries. But they have to kick things into higher gear. That all starts with fixing full self driving and getting that $25,000 car into the market,” he said to CNBC.

Revised low-cost Tesla model: Commentary in the June AutoForecast Monthly from AutoForecast Solutions stated that the low-cost vehicle is “now thought to be a slimmed-down vehicle based on the Model Y.” The report went on to say that Musk “did explain that Tesla would produce a new range of vehicles in the near term. All new vehicles, including the revised low-cost model, are to use ‘aspects’ of the delayed next generation platform in tandem with design features of the current-production models’ platform,” the report said, citing Musk who said during the first quarter earnings call that “We think this should allow us to get to over 3 million vehicles of capacity when realized to the full extent.”

The market will demand a $25,000 Tesla: Stellantis CEO Carlos Tavares confirmed at the end of last month that a $25,000 electric Jeep is coming to the U.S. (via Car and Driver). And General Motors is working on a future Chevy Bolt due in 2025. The Bolt has been GM’s best selling EV, in large part due to its $26,500 starting price. And the first tranche of Chevy Equinox EVs is now arriving at dealers with a low-cost trim expected later this year. Ford is also rumored to be working on a $25,000 EV. Not to mention the threat of ultra-low-cost EVs from China-based BYD, including a sub-$10,000 Seagull. Tesla’s existing models are getting “long in the tooth,” said Pat Ryan, Founder & CEO of CoPilot, an AI-assisted car shopping app. So, the company needs something new. “It’s clearly a new model,” he said in reference to the Model 2.