More Affordable Vehicle To Join Tesla's EV Lineup, Cheaper than Model 3 and Model Y

On Wednesday, Elon Musk said during the company's earnings call that a cheaper Tesla EV would be available on the market. He said that it would be almost half the cost of Model Y and Model 3.

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Tesla Model X Charging

Rumored $25,000 Tesla EV

Musk said during the earnings report's Q&A session that Tesla's next platform will be more compact than the company's Model 3 sedan. The next-generation vehicle will be smaller than the existing models, and Musk said that he thought that it would certainly exceed the production of all other vehicles combined.

Musk did not reveal the vehicle's name. He did not disclose a release date either. Yet, according to Inside EVs, the billionaire CEO did say it's the primary focus of the new vehicle development team.

The unnamed car has been heavily speculated on by Tesla fans due to its rumored $25,000 price tag. The rumor was based on a statement from Musk back in 2020. Musk, though, seemed to break his promise earlier this year when he claimed Tesla had too much work to do to continue developing the vehicle. But as of this writing, it appears that he has changed his mind and will go with the less expensive EV.

According to Futurism, the upcoming car will potentially allow the automaker to target an underserved market of buyers with a limited budget because mass manufacturing will be possible at an affordable price. Developing a brand-new platform, however, is a very difficult task that, as we've seen with many of Tesla's other products, typically takes considerably longer than Musk would have hoped.

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Tesla Hatchback

The $25,000 car, according to Tom's Guide, is a Tesla hatchback. Initially, a 2023 launch date was predicted; however, supply chain concerns have caused the EV to be delayed. Due to the company's emphasis on the Cybertruck and the Roadster, the hatchback has been placed on hold.

It's not clear if the price point includes the advertised "opportunity savings discount" or if it refers to the entire purchase price. Some may argue that this is misleading. However, even if you have to pay more, it is said that this amount accounts for federal incentives and gas savings.

According to Elon Musk, these prices won't decrease unless inflation is brought under control, and as a result, the $25K price tag may no longer be viable.

Musk has already stated that the Standard Range Tesla Model Y will be discontinued in early 2021 due to its limited range of 244 miles. Musk apparently thinks that anything below 250 is unacceptably low. The affordable car will probably have a range of a minimum of 250 miles unless there has been a significant philosophical shift at Tesla in the last year. Since Tesla hasn't yet created a front-wheel-drive vehicle, rear-wheel drive appears to be the most likely option.

Musk said that this new platform aims to produce more volume than all of Tesla's other vehicles combined.

He added that they are going to take everything they learned from S, X, 3, Y, Cybertruck and Semi into that platform. Yet he said that they are on a 2-for-1 target. They are trying to get to that 50% [of cost] number again.