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Tesla’s $25,000 'Model 2' could launch a lot sooner than expected — here’s why

Tesla Model 3
(Image credit: Shutterstock)

A more affordable Tesla might be coming sooner than expected, as according to a post on Chinese social network site Sina Weibo, the first prototype of what could be the $25,000 Tesla hatchback has been built. 

Going by the rumors thus far, this car might be called the Tesla Model 2 and will offer a cheaper and more compact alternative to the Tesla Model 3. Given the Model 3 starts from $35,000 with prices moving steeply as you move up models, a cheaper Tesla would certainly make it easier for people to get on board the EV train.  

The source behind the rumor is apparently a rather reliable one according to InsideEVs. We’d still employ a dose of skepticism here, especially when Tesla has a reputation for delaying its cars, but this is some compelling evidence that we could expect a cheaper Tesla car before too long. 

When could that be? Well if a prototype has been made, then testing is likely to go underway soon, meaning we could even see this rumored Tesla hatchback some time next year or maybe 2023. 

If Tesla does indeed come up with a cheaper EV then it could spark other traditional car makers to explore making more affordable EVs, too. While there are more electric cars than ever, many of them are far for cheap, which tends to see more environmentally conscious people opt for hybrid cars rather than full electric machines. 

However, there was some good this week on this front. Nissan has just dropped the starting price on the Leaf S to $27,400, making it the cheapest EV on sale in the U.S. And President Biden has just made an executive order demanding that 50% of all new cars sold in the U.S. be electric by 2030, which could spur further momentum in this market. 

We don’t know much else about this $25,000 Tesla other than Elon Musk has confirmed that the company is working on such a car. And apparently the EV will use a new battery design that will be 35% smaller than other Tesla EV batteries and thus allow the eclectic car maker to come up with a more compact vehicle. 

A smaller car with a more compact battery, yet one that’s supposedly able to offer 16% more range per kilowatt, could lead to a lighter overall EV, meaning less energy will be needed to move it and thus more range can be squeezed out of the battery. If Tesla can produce an affordable car with an impressive range, as well as some of the tech that helps make Tesla cars appealing, then it could be onto a winner. 

Roland Moore-Colyer

Roland Moore-Colyer is U.K. Editor at Tom’s Guide with a focus on news, features and opinion articles. He often writes about gaming, phones, laptops and other bits of hardware; he’s also got an interest in cars. When not at his desk Roland can be found wandering around London, often with a look of curiosity on his face.