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Tesla will begin production of low-cost EV in 2025: report


The cheaper Tesla will be built in Texas initially and could cost between USD$20,000 and USD$30,000 

Tesla is slowly inching its way further towards the production start of its highly-anticipated cost-effective EV. 

According to Automotive News, Tesla chief Elon Musk told investors during an earnings call that the “we’re very far along” in the development phase of a cheaper Tesla.

Automotive News also estimates that the price of the upcoming model could sit somewhere between USD$25,000 – USD$30,000 (AUD$38,000 – AUD$45,000). 

An AI concept of what the next Tesla model could look like

The smaller electric vehicle could be Tesla’s response to the boom in budget Chinese EVs such as the MG4, the BYD Dolphin and also the GWM Ora

Expect an official announcement and preview of the car by the end of 2024. 

What we know so far about the budget-friendly Tesla

The cheaper Tesla model is part of the brand’s push for a 10-vehicle lineup by 2030 and a huge increase in production, with a target of 20 million units per year already set. 

2023 Tesla Model Y side profile in forest
Tesla is busy selling Model Y and 3 in Australia

Tesla is very likely to use its new gigacasting way of manufacturing, with Elon Musk saying that “this is going to be profound, not just in the design of the vehicle itself, but in the design of the manufacturing system”. 

This will mean that the cheaper Tesla could be produced for far less than the rest of the range, which includes the Y, 3, X, S and the recently launched Cybertruck

The new model which could be simply called ‘Model 2’ or ‘Redwood’ will be built on Tesla’s next-generation platform. Unfortunately, most of these details still remain under wraps. 

An AI-generated image of a small Tesla vehicle

Tesla changes where its cheap EV will be built 

At first, there were plans of Tesla building a new budget car in India, then things moved to Germany, but now, it’s much more likely that the new affordable model could be built in Austin, Texas, where Tesla is headquartered. 

According to Musk, this will be so that Tesla engineers can be close to the production facility as the project continues to develop. 

Tesla does plan to build additional factories, and has been in talks to build factories in India, France and even Turkey. 

The brand currently has gigafactories located in Nevada, New York, Texas, Mexico, Shanghai and Berlin.

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