Thus far, Tesla has made it clear it's sticking to its mission. As promised, it did eventually bring a smaller, mainstream electric car to market: The Model 3. Despite naysayers, it also eventually offered it for $35,000. While that trim is being phased out, Tesla still offers Model 3 Standard Range Plus for $37,990, prices continue to drop for its vehicles, and range and features are growing.
Tesla CEO Elon Musk has talked many times in the past about the potential for a car that's even smaller and less expensive than the Model 3. He wants to further push EV adoption, and for that to happen, these cars need to be in reach of the masses across the globe. Now that Volkswagen is diving into the EV game, and its ID.3 compact electric hatchback is successful, it's time for Tesla to move forward with its future plans.
More recently, Musk brought up the Tesla compact car concept yet again. According to Autocar, Musk spoke at a European conference in Germany. Bloomberg quotes Musk saying:
"In Europe, it would make sense to do a compact car. I'm sure there will be others as well."
This year Tesla launched its Model Y crossover in the States. It's based on the Model 3 and expected to sell even better since SUVs are all the rage on our shores. Honestly, it's quite surprising how well the Model 3 has sold in the U.S. since sedans have fallen out of favor. Hypothetically, the Model Y "should" sell better, though if that does happen, we probably won't realize its full potential until the Model Y is available in cheaper trims.
As we've said before, Tesla would be smart to go in the opposite direction in Europe. Rather than focusing on larger vehicles and SUVs, a highly maneuverable, well-priced, electric hot hatch would likely sell in droves abroad. Moreover, it would probably surprise us like the Model 3 and end up selling well in the States (if Tesla offered it here, though the ID.3 isn't coming to America). The affordability factor of a compact Tesla would likely entice buyers on our shores. Musk told investors and analysts on a recent conference call:
“... we will not succeed in our mission if we don’t make cars affordable.”
“The thing that bugs me the most about where we are right now is that our cars aren’t affordable enough. We need to fix that."
“... it would be reasonable to assume that we would make a compact vehicle of some kind and probably a higher-capacity vehicle of some kind."
Autocar says it can only assume Tesla would look to its upcoming Gigafactory near Berlin, Germany to produce an upcoming compact car. Musk has already said the factory will be incredibly state-of-the-art. In addition, Tesla is working on new battery tech that could allow it to produce cheaper cars. With more energy-dense batteries, a smaller car could house a smaller battery pack, or even a structural battery pack, and still have solid performance and plenty of range.
Volkswagen may have an edge on Tesla at the moment. This is especially true when you look at the German automaker's scale and reach. Its manufacturing capacity is massive. However, Tesla is currently building multiple factories, and its mammoth casting machines should help it further expand its production efforts, speed up the process, and reduce manufacturing costs.
Do you think Tesla will eventually release a compact hatchback to compete with the VW ID.3? If so, how soon might it happen? We'd love to read what you think in the comment section below.