Tesla’s Affordable EV Might Be Even Cheaper Than We Thought — But With One Big Catch

A cheaper price tag could mean compromising on range.

A Tesla Model y car stands in front of the company's plant as Tesla CEO Elon Musk visits the company...

There’s a chance that Tesla may be targeting an even lower starting price for its upcoming EV than we thought, according to a report by Evercore analysts, as first reported by Bloomberg.

Tesla will reportedly seek to lower the starting cost of its upcoming affordable EV — which most people have been referring to as the Model 2 — to $20,000. It sounds like a serious challenge to get down to that price point, but it would help Tesla fend off the barrage of ultra-affordable EVs it’s facing overseas.

Tesla needs a serious affordable option to go against all the competition in China.


Full of Compromises

More specifically, the Evercore report notes that Tesla will drop its bill of materials from $28,000 to $20,000. That’s a significant amount of savings when it comes to production, which we’re hoping trickles down to its final sticker price.

However, that drop in production costs comes with a serious catch. Tesla may have to compromise on the potential Model 2’s range, build, and tech to reach a price point that’s even lower than $25,000. According to the report, the upcoming Tesla EV would have a range of 250 miles, which is much less than the existing Model 3’s up to 341-mile range. This decrease in range could be due to a smaller, cheaper battery.

The report points out that Tesla may exclude the all-glass roof that its EVs are known for. On top of that, there’s a “big debate” as to whether the EV maker will include its “driver-assistance hardware,” according to the report. If Tesla chooses not to include these capabilities, it could save anywhere between $2,000 and $3,000, the report also notes. With all of this combined, we may be getting a watered-down version of Tesla’s other EVs with the upcoming Model 2. Still, if it’s anywhere close to $20,000, we’ll gladly take it.

Tesla may opt out of including a glass roof, like the one we see with the updated Model 3.


Targeting 2025 and Beyond

We still don’t have a confirmed release date for the potential Model 2, but Tesla’s CEO Elon Musk previously said in an earnings call that the company plans on starting production on a mass-produced EV in the second half of 2025. Considering how Tesla ramps up its EV production, like with the Cybertruck, it could take until 2027 before we see the real impact of the Model 2.

We can’t forget that Tesla hasn’t even officially announced its affordable, mass-produced EV yet. We may have plenty of info circulating about this highly-anticipated EV from Tesla, but we’re still waiting for an actual reveal.

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