A Tesla Model 2 for $19,000: Just a Pipedream—or in the Pipeline?

Red Tesla logo

“Ever since Tesla shared a sketch of a small electric hatch last year, rumors have swirled around a sub-Model 3 offering that could allow the EV automaker to challenge the likes of the Nissan Leaf and Chevrolet Bolt. Relatively little has been shared since on the progress of the Model 2, as it has unofficially been dubbed, despite Tesla’s habit of dropping hints about upcoming models for years ahead of launch…. Tesla CEO Elon Musk reconfirmed plans for such a $25,000 vehicle during Battery Day last year, indicating that it would arrive in three years, but has otherwise remained largely silent about the company’s progress on such a model.”

— Jay Ramey
‘Here’s Why a Tesla Model 2 Is a Must for the Company’
(Autoweek, March 1, 2021)

Battery Day Revelations

Are you ready for the cheapest, and perhaps the spunkiest, Tesla yet?

In 2006, Tesla’s CEO and co-founder Elon Musk shared his vision of investing the proceeds from the sale of his premium vehicles toward manufacturing a medium-volume car. Furthermore, he spoke of using the funds thereby accrued to subsidize the development of a high-volume, affordable electric vehicle (EV). In keeping with that objective, Musk hinted at his plans for the “Model 2” on Tesla’s Battery Day in 2020:

When the first Tesla Roadster sparked to life in 2008, the high-tech components needed to make an EV—the motor, the batteries, etc.—were all rather expensive, as not many companies were manufacturing them. Take Mercedes, for example. Its first EV, the EQC, cost upwards of $65K; but now the smaller, cheaper crossover, the EQA, goes for about $20K less.

Over the past decade, the cost of essential parts for manufacturing EVs has decreased significantly, while the technology itself is being continually upgraded, fine-tuned, tested, and rolled out to the consumer public. These EV economies of scale support the vision of Elon Musk, who always wanted to sell a high-volume, affordable EV, dating all the way back to his 2006 Master Plan. As he said on Battery Day 2020, “We’re confident that long term we can design and manufacture a compelling $25,000 electric vehicle.”

And it may look something like this:

Tesla Model 2 Sketch
Sketch of possible Tesla Model 2

What’s Different About the Tesla Model 2?

The Tesla “Model 2” (not its official name) is currently being manufactured at Tesla’s Shanghai Giga factory as the first locally designed electric car made at Tesla’s China Design Centre. From there, the Model 2 will be exported to other countries, including the U.S.—a smaller but growing market for EVs.

The Tesla Model 2 will be powered by a new breed of batteries that is more powerful, safer, and cheaper. These new “tab-less batteries” employ unique connectors to join all the high-functioning cells. Unlike regular batteries that engage tabs to secure connections—which sometimes leads to overheating—the tab-less batteries store and release more electrical energy without the risk of overheating. The Tesla Model 2 is expected to have a driving range of about 350–450km. Additionally, this EV will be about 35% smaller than its traditional counterparts, making it lighter, remarkably spacious for its size, possibly faster, and significantly cheaper.

Here’s where it gets interesting. Most EVs store their batteries in the floorbed of the frame. Such a design presents a problem in smaller cars. Ripping a page from aircraft design, Tesla circumvented this challenge by creating a “structural battery”—making their new batteries an integral part of the car’s chassis. This technique also strengthens the frame of the vehicle in the same way fuel tanks housed in the wings support an airplane. It will also make the cars cheaper and quicker to build, as they will require less assembly. By some estimates, the structural battery will have 370 fewer parts than a regular battery! This innovative design will make the Tesla Model 2 as much as 10% lighter than EVs of similar size. The Model 2 will be smaller than the Model 3 and sit lower than the Model Y.

And the Final Cost for All This Tesla Model 2 Innovation? (Drum Roll, Please)

Musk made an official statement claiming that the Tesla Model 2 will cost $25K—which is less than half the price of the cheapest Model 3. And if you are an optimist, you can expect that the deal could get even sweeter!

If the Biden Administration passes the GREEN (Growing Renewable Energy and Efficiency Now) Act, it will provide a tax credit of $7,000 to 600,000 vehicles instead of the current cap of 200,000. This would benefit both Tesla and GM, since these automakers have sold over 200,000 EVs and are no longer eligible for the federal tax credits. After destination fees, that results in the incredibly low price for a brand new Tesla EV of $19,000.

Tesla Recharging Station
Could this be you in a few months?

If the Chinese news media is to be believed, the Tesla Model 2 will be unveiled in China in November 2021 at the Guangzhou Auto Show, and deliveries will begin as early as 2022. Should the GREEN Act bill pass in the coming months, Tesla will not hit the 400,000-cap by the time the Model 2 arrives, thereby benefiting from the $7K credit.

The Tesla Model 2 hatchback could blow your socks off without blowing a hole in your pocket. And at Keri Coach, you can expect the same level of expertise and perfectionism to repair all Tesla auto bodies, whatever the model or price. We are excited about the new tab-less batteries and are fully equipped to repair your damaged Tesla and restore it to mint condition.