Tesla just announced a brand new car — a $25K hatchback coming in 2023

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Tesla is going after the budget EV market soon

Tesla Model 3
(Image credit: Shutterstock)

Tesla may be a titan in the electric car business, but the days of it being the only serious EV-maker are long gone. Competition is picking up, and that means changes are coming.

Tesla has revealed that it’s working on an electric hatchback that's coming in 2023, as reported by Autocar, designed to help compete with the likes of the VW ID.3. So it’ll be smaller and cheaper, but packs in the same Tesla features as other cars. 

Elon Musk announced this news at Tesla’s Battery Day event, and promised that the car will cost less than $25,000 — making it at least $10,00 cheaper than the cheapest Tesla Model 3.

Evidently the price and size of the car is helped by a brand new battery design. The new battery uses a tabless design that promises to be 35% smaller than conventional batteries, which promises to be cheaper, safer and more powerful.

According to Tesla, this means the battery offers five times more energy and six times more power, all of which comes together to offer 16% more range per kilowatt hour of juice.

Of course, the battery is just one aspect of an EV’s construction, and this car is no different. The Tesla hatchback is set to have a new lighter design, in part helped by the lighter battery and the fact that the battery packs will help support the car’s underpinnings. All this will make it 10% lighter than conventional EVs, and help boost the range by a further 14%.

It’s not clear how much range this will translate to once the car is released. However, Elon Musk has slammed cars with less than 250 miles of range as “unacceptably low” last July. That’s what led to the cancellation of the Standard Range Tesla Model Y, which could travel only 244 miles.

In other words, a minimum of 250 miles seems pretty likely, which would be fantastic at this price point. Of course, we can’t guarantee this will be the case, and things may change over the next year or two.

Musk also promised that the Tesla hatchback would be fully autonomous. Though it’s not clear whether he means the still-hypothetical level 5 autonomy, which doesn’t require a human driver, or Tesla’s ‘Full Self Driving’ Autopilot, which requires an attentive human in the driver’s seat at all times.

Tesla hasn’t announced much more about the car right now, but this is still big news. Teslas are very desirable cars, in part due to the fact they offer some of the best performance and range compared to the competition.

While the company is firmly committed to the premium electric car market, especially with the newly-launched Tesla Model S Plaid and the upcoming Tesla Roadster 2022, it’s great to see that it’s not ignoring drivers who are on a budget. Especially if that same performance and range will be available for such a comparatively low price.

Tom Pritchard
Tom Pritchard
UK Phones Editor

Tom is the Tom's Guide's UK Phones Editor, tackling the latest smartphone news and vocally expressing his opinions about upcoming features or changes. It's long way from his days as editor of Gizmodo UK, when pretty much everything was on the table. He’s usually found trying to squeeze another giant Lego set onto the shelf, draining very large cups of coffee, or complaining about how terrible his Smart TV is.