Tesla’s $20,000 Compact Car Is Coming

Elon Musk’s grand ambitions and visions stem from the core of Tesla’s priority and mission, which is to accelerate the transition to more affordable electric vehicles and high volume.

Musk explains that the overarching purpose of Tesla vehicles and his reason for founding the company in 2003 was to help expedite the move from a mine and burn hydrocarbon economy towards a solar electric economy.

Tesla is working hard on cheap and affordable compact cars manufactured in China and distributed worldwide.

Elon Musk’s master plan for Tesla includes a list of the company’s main goals, which part one was to manufacture a low-volume expensive car.

The use of the money realized to produce a medium volume car at a lower price, then use the money from sales of that vehicle to create a more affordable high volume car.

Elon Musk mentioned that the company could probably make a fully autonomous $25,000 Tesla about three years from now, which at the time would be referring to September 2023.

This means that Tesla wants to and is already creating all kinds of different vehicles, including electric semi pickup trucks, crossovers, vans, and hatchbacks.

Tesla has been thinking of creating a twenty thousand dollar car for a long time. in the beginning, Tesla was a car priced for people who were making at least six figures for their yearly income.

But with the production of the Model 3, the market size for Tesla expanded because more people could afford it. On that note, Tesla plans to commence production on the manufacturing of the Model 2.

They aim at making this car very affordable for everyone with the elimination of gas and the addition of incentives. In addition, Tesla wants every family to own a Tesla vehicle, as is one of the goals and visions of Tesla CEO Elon Musk.

The battery technologies required for a compact car like this will be unveiled on battery day. This will enable Tesla to make a small car for less than twenty-five thousand dollars, possibly close to twenty thousand dollars or less.

The battery cost is the main factor driving down the cost of an EV. the new batteries will allow Tesla to shrink the battery pack’s size while offering enough range for everyday driving.

Elon Musk’s speech at battery day hinted that the car would be unique, and the introduction of a cheap electric car could accelerate EV adoption.

The car, popularly known as the Model 2, has the potential to turn into a money-saving and very affordable machine without the need for gas.

This was confirmed recently when Tesla’s China president Tom Zhu confirmed in an interview with a Chinese media outlet that the company’s upcoming $25,000 Tesla car will be designed with China in mind but sold globally.

It isn’t expected to be unveiled until the end of this year. This means that the production could be as much as two to three years away. However, if the Model 2 is released, it will be an important vehicle to Tesla and a main staple in the electric vehicle industry. This car could potentially sell lots of units for Tesla.

The Model 2 could easily help lower the price of the Model 3 by decreasing its demand. Many buyers would opt for the cheaper and smaller Model 2, thus reducing the demand for the Model 3, which is important because the Model 3 price is currently quite high for the average person.

The list of potential incentives on the $25,000 car is a long one. These new incentives are not set in stone but have a high likelihood of happening.

A $10,000 federal incentive for EVs has to be put in place, and Tesla needs to commence production and deliver.

It is no secret that the goal of Tesla has always been to provide affordable, fast, and efficient EV vehicles for the entire family.

This vision could be made a reality with the introduction and production of the Model 2. Tom Zhu said that construction is already underway in the local research and development center.

This is the site that would cover everything for this new Tesla Model, including vehicle design engineering development, and testing.

China is the world’s biggest market for electric vehicles, so it has strong government support for pretty much all EV companies. Also,

Tesla’s Shanghai gigafactory is extremely fast and efficient as the first Chinese Tesla car was built and delivered to customers in due time, which was just about a 10-month duration after the construction of the facility began.

The facility also has a very high production efficiency with a low supply chain. With this said, Musk and his team are quite optimistic about the commerce and manufacturing of Tesla’s new Model 2.

Tesla released a single design sketch of the car, which looked like a baby hatchback version of the Model 3. the Model 2, although still, a theory is very realizable as Musk explained that the new battery enhancements would enable the production of a Tesla EV at this level in three years.

There would be a choice of having a well-built German fossil-fuel car or a semi-premium EV with over 300 miles of range and much faster performance that will also be very affordable.

The new model is said to be offered in china first before coming to the U.S, and if and when the new model makes it to the U.S, it can have an even cheaper price tag of around $19,000 for some customers if the new EV tax credit bill is passed.

Recently the Democrats proposed a reform to the federal EV tax incentive program called the green act. if passed, it could provide Tesla with a tax credit of up to seven thousand dollars for four hundred thousand additional vehicles sold in the U.S.

Remember that this tax credit applies only to electric cars sold in the U.S. there is already a current federal EV tax incentive program in place, and thousands of people took advantage of this when they bought their first Tesla vehicle if we assume some year overgrowth on Tesla’s U.S sales.

Let’s be conservative and guess with an estimate that if the green act does not get approved then Tesla may very well have a $7,000 tax credit for an entire calendar year to cover over 400,000 vehicles sold in the U.S.

Here’s where we put on our optimistic hats because if the bill does not get passed this year and Tesla Model 2’s timeline is ahead of schedule, then it could be possible to buy the upcoming $25,000 Tesla Model 2 in the U.S and get $7,000 tax credit.

This would bring the cost down to $19,200 after factoring in Tesla’s required documentation and delivery fee, currently one thousand two hundred dollars.

However, even if this does not happen, you could still get a new Tesla for under twenty thousand dollars, and this would be a high success and giant smackdowns to gasoline vehicles.

Even though the $7,000 tax credit doesn’t get passed or is gone by the time the Model 2 comes to the U.S, the car will still be a big gap in the compact hatchback market where the Toyota Yaris and Honda fit have been discontinued.

Of course, you’ll be expected to pay more for the extras like the full self-drive or another paint color, but at the end of the day, the base Model 2 is still a Tesla at its core and will have the unmatched drivetrain battery efficiency and high safety standards that Tesla prioritizes in all of its vehicles.

Regardless of what kind of car the Tesla Model 2 turns out to be, it is certain that this introduction will bring Tesla one step closer to the unchallenged market presence even amongst established car brands.

So what do you guys think would this Tesla Model 2 truly be the end of gas?

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