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Tesla debuted the Model S Plaid earlier this year as the world's fastest series-production car, and it plans to push the envelope at the low end of the lineup over the next few years. But not in terms of acceleration and performance, but rather in terms of cost. It is designing an EV with a price tag of USD 25,000 to fully democratize electric cars.
Tesla hasn't released the name of its entry-level electric vehicle, but it's been dubbed the Tesla Model 2 and even the Tesla Model Q by the media. However, Tesla’s Technoking, Elon Musk, confirmed at the 2021 annual shareholder meeting that it doesn’t plan to use the Model 2 name saying:
"Model 2 is not a car. There’s no Model 2." He also added, "We’re continuing work — development work on the Semi, Cybertruck, the Roadster and other products.”
According to rumors, Tesla has completed the Model 2 prototype in China. Tesla has great expectations for China as a future R&D and production center. Musk stated during the World Internet Conference 2021 opening ceremony on September 26, 2021, that the company will continue to increase investments and R&D efforts in the country.
Prototype design. Source: Tesla/Weibo.
The development of the USD 25,000 Tesla is likely to be influenced by its first R&D center outside of the United States, from initial design to final testing. Tesla China President Tom Zhu revealed that the company will be able to design, engineer, develop, and test models at this plant in the United States. The new R&D facility will most likely open this year.
Tesla has discussed the ultimate goal of the Tesla China R&D center on several public occasions, according to Zhu, signaling that the USD 25,000 project will be the center's star project. He hinted that the next entry-level Tesla would be a global model rather than a China-only vehicle.
The full self-driving package (Tesla Autopilot) will most likely be available in the cheap Tesla Model 2, providing autonomous features to a wider audience. Musk verified this at the 2020 Battery Day event, stating that Tesla is confident in producing a fully autonomous $25,000 Tesla model in three years.
The Tesla Model S features one of the most futuristic automotive interiors, and its new yoke-like steering contributes significantly to this impression. Without pedals and steering, the Tesla Model 2's cabin may look even more futuristic.
Autonomous driving concept cars with retractable pedals and steering are being developed by traditional automakers. Tesla is planning ahead and may not include pedals or steering.
Tesla may equip the Model 2 with a new iron-based battery that has a long cycle life. Furthermore, Tesla's decision to switch from nickel to iron for its entry-level future cars demonstrates the company's desire to reduce vehicle costs. Tesla would have less supply constraints if it used an Iron basis (which is more prevalent than Nickel).
While Tesla news sites anticipate that the Model 2 will be a sedan or crossover SUV, production could take place at both the Tesla Gigafactory Shanghai and the Tesla Gigafactory Berlin. A Chinese Environmental Impact Assessment document from 2020 mentioned growing production capacity at the Shanghai site for Model 3, Model Y, and associated derivative models.
Meeting the target price of USD 25,000 is difficult given the high level of quality Tesla plans to provide even in its most basic car. The corporation, on the other hand, is adamant about achieving that goal.
The Tesla LFP battery (Lithium Iron Phosphate) would be an essential component of the Tesla Robotaxi due to its long cycle life. For commercial applications, a long cycle life is essential. The Robotaxi might be a Model 2 clone with some of the Model 2's luxury and convenience features removed. Tesla could get crucial insights into this chemistry for optimization in the mass-market Model 2 in 2023, given that the Model 3 already has an LFP battery.