YouTuber Andy Slye optimistically explains how the upcoming cheap $25,000 Tesla could only cost $19,000, and possibly kill off the gas competition. At the beginning of the video he warns us that he is being very optimistic about all this, but it could happen if the timelines lineup.
He starts with explaining how Elon Musk always wanted a high volume affordable EV. In his Master Plan from way back in 2006, he outlined how he wanted a low volume expensive car (Roadster) to fund a medium volume car at lower price (Model S). Then use the money from that to fund the creation of a high volume affordable car (Model 3 and/or 2?). The tweet below gives you a good idea of what he is talking about.
Then, in his Master Plan 2 (2016) he stated,
“Expand the electric vehicle product line to address all major segments.”
Meaning to create EVs for everyone, including the commercial sector: affordable cars, semi trucks, vans, and more.
The video continues outlining what was said at the end of Tesla's Battery Day presentation. Besides talking about the $25k Tesla car (which will likely be a hatchback), Musk said it would be fully autonomous in three years and still cost $25k.
He then explains how the $25k Tesla could come sooner than expected because the design phase has already started in China. The new model will be built in Giga Shanghai, which is extremely efficient and can pump out EVs very quickly.
“The plan for Giga Shaghai has always been to produce the Model 3, the Model Y, and now this new upcoming model 2 compact hatchback.”
Last week, Tesla China President Tom Zhu said China would be designing the new Tesla and it might be finished in about a year. There was also a timeline rumor from Chinese Media IT Home (above) stating that the first delivery would happen in 2022, shortly after its reveal at the Guangzhou Auto Show in November of this year.
The YouTuber goes on to explain how the $25k Tesla could be $19k (after Tesla destination fees) if the government passes the Green Act bill that would allow for $7,000 in tax credits for 400,000 Teslas. This would only happen if the Model 2 hits our shores with the new tax credits in place.
This would put Tesla’s upcoming hatchback under $20k, the same price as the gasoline compact car competition. However, he reminds us that a $25k Tesla would be very basic, but still have all the positives that come with a Tesla, such as battery efficiency, safety, and OTA updates.
Tesla’s affordable hatchback is coming. If it comes at the same time as the new tax credits (if passed), many more consumers would be able to afford a Tesla.