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The $25,000 Tesla Model 2 Might Not Be As Mythical As It Seems

The Tesla Model 2 is said to go on sale in 2023, so in Elon Musk time, we’ll see it in 2024 and deliveries will start in 2027

Tesla has got four mass-produced models in the market today and all of them are doing extremely well. The S3XY range is now mature and will keep the ball rolling for the automaker, but it’s now time for Tesla to focus on its next quartet to further establish its dominance. We already know that the Cybertruck, the next-gen Roadster, and the SEMI are in the pipeline, but there’s another upcoming model that could become the company’s best-seller if it plays its card right. We’re talking about the supposedly mythical, $25,000 hatchback, dubbed as the Model 2, and Autocar seems to have some news about it

The publication has reported that Tesla’s cheapest EV is set to go on sale in 2023. Now, going by Musk’s timeline, we don’t see that happening for at least the next 2-3 years. Would customer deliveries in 2027 be a realistic expectation?

There Have Been Numerous Timelines In The Past About The $25,000 Tesla EV’s Launch

The $25,000 Tesla Model 2 Might Not Be As Mythical As It Seems
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Ever since the news about a $25,000 Tesla emerged, there have been a lot of speculations about its arrival time. Initially, it was expected to arrive sometime in 2024 or 2025. But, an eco-assessment report of the Gigafactory 3 in China started doing rounds that hinted at the car going into production in 2022.

At the 2020 Tesla Battery Day event, Musk had said, "In three years . . . we can do a $25,000 car that will be basically on par (with), maybe slightly better than, a comparable gasoline car,". This was also, in a way, the official announcement of the cheapest Tesla.

Now Autocar reports that the car will go on sale in 2023. Does this mean the company will start accepting reservations in 2023 and deliveries could begin a few years thereon?

What Makes The $25,000 Tesla An Anticipated Product?

Affordable Price

The $25,000 Tesla Model 2 Might Not Be As Mythical As It Seems
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There’s no denying that the biggest catch of this EV will be its $25,000 starting price. And, if all the stars align, the Model 2 could cost as low as $18,000 for some lucky birds. How, you ask? Well, the Biden administration is looking to pass a GREEN Act that would triple the federal tax credit cap for electric vehicles.

The tax credit will be offered on 600,000 vehicles from each automaker instead of the current cap of 200,000 vehicles. As we know, Tesla has surpassed the 200,000-cap and isn’t eligible for a federal tax credit under the current regime. But, if the GREEN Actcomes into play, 400,000 more vehicles from Tesla will be eligible for a federal tax credit of up to $7,000; $500 less than the first cap. Mind you, this is without factoring in the state credits, which bring down the effective price considerably lower. Check out how cheap the new Ford F-150 Lightning costs in some states.

The $25,000 Tesla Model 2 Might Not Be As Mythical As It Seems
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Tesla delivered 235,000 cars in the U.S. in 2020 (499,550 worldwide). This means the company could exhaust its fresh cap in less than two years. The company started 2021 even stronger, delivering 184,800 Teslas all around the world, thus relishing the best quarter in its 13-year history. There’s no word on when the GREEN Act will be passed, but, there’s a high chance that the Tesla models currently on sale will benefit from this scheme and the $25,000 could miss out. Until there’s no confirmed timeline on both, the GREEN Act and the cheapest Tesla’s arrival, it’s hard to say.

250 Miles of Range

The $25,000 Tesla Model 2 Might Not Be As Mythical As It Seems
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You shouldn’t expect much from a $25,000 EV, but logic dictates that the car will favor range over performance. So, how much range are we looking at? Not less than 250 miles, to start with. The lowest range that Tesla currently offers on its models is on the Model 3 Standard Range – 263 miles. Back in July 2020, Musk had tweeted that a range of fewer than 250 miles as per the EPA estimations would be “unacceptably low”.

It was said in a different context, but it could hold true here as well because the company has developed new batteries that will help contain costs. At the 2020 Tesla Battery Day event, the automaker revealed its new battery called the 4680, which refers to its dimensions - 46mm by 80mm.

The $25,000 Tesla Model 2 Might Not Be As Mythical As It Seems
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An eco-assessment report of the Gigafactory 3 in China started doing rounds which hinted at the car going into production in 2022

It boasts of a tabless cylindrical cell design and is bigger in size than what Tesla currently makes use of. The 4680 cell is said to offer six times the power, five times the energy capacity, and 16-percent more range than the current crop. The highlight of this is that the 4680 cell will result in a 14-percent cost reduction per kWh at the cell form factor level.

This battery wasn’t used in the recently unveiled Model S Plaid, so it could mean Tesla has reserved it for the ‘budget’ models.

Tesla’s First Hatch

The $25,000 Tesla Model 2 Might Not Be As Mythical As It Seems
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Tesla has four new products in the pipeline - the Cybertruck, the SEMI, and the next-gen Roadster, and a new $25,000 EV that could be called the Model 2

There is no word on the body style, but it could be Tesla’s first hatch. The company has two sedans, one crossover, one SUV, a pickup truck (if we can call the Cybertruck that), and even a sports car. The only popular niche that’s left is a hatch. It also makes sense to offer a hatch as your cheapest design. A crossover will undermine and cannibalize the Model Y, and adding a third sedan would do the same to the Model 3. So, it would be safe to assume that the $25,000 will be a hatch. It has even been rendered in its signature doe-eyed looks in the past.

Apart from all this, we speculate the $25,000 Tesla to have:

  • A single-motor setup for the base trim (front-wheel-drive, most likely)
  • 0-60 mph in around seven seconds
  • In the ballpark of 200 horses and 225 pound-feet of torque
  • It will be available with Autopilot (Musk has confirmed the same)

The fact that Tesla will offer Autopilot on this model could hint at Robotaxis. Autonomous mobility is the future and we have even discussed this in-depth in the past.

Conclusion

The $25,000 Tesla Model 2 Might Not Be As Mythical As It Seems
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A lot of timelines were speculated for this new car in the past, but now Autocar has mentioned that it could go on sale from as early as 2023

There is already a lot of buzz about the $25,000 Tesla, but the timeline is still sketchy. Autocar has said it will go on sale in 2023, but can it? We don’t expect deliveries to begin anytime soon, though. It will be built in China and exported all across the globe. Some reports suggest it will be designed and developed in Germany. We’ll have to wait to see how everything turns up.

When do you think the $25,000 Tesla – or the Model 2 – will arrive? Share your thoughts in the comments section below.

Source: Autocar

Sidd Dhimaan
Sidd Dhimaan
Senior Editor, Truck Expert, EV Expert - sidd@topspeed.com
Sidd joined the Topspeed.com team in 2017 as an intern and in less than a year he earned a full-time position as an associate editor and junior automotive expert. Fast forward to today, and he is currently serving as a senior editor, pickup truck expert, and EV expert.  Read full bio
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