Update: ‘Sub-30k Tesla Model Q to arrive in 2025?’ section included to the end of the story.
The USD 25,000 Tesla EV might no longer be happening, in what would arguably be the biggest U-turn from the world’s most prominent electric carmaker. Rumored to be called ‘Tesla Model 2’ or ‘Tesla Model Q,’ the entry-level compact EV is said to be canceled from the pipeline. However, recent developments indicate the Tesla Model Q could still be on the cards, but in a slightly higher price band.
It was back in August 2018 when Tesla first started saying it could launch a USD 25,000 car. In an interview with YouTuber Marques Brownlee (MKBHD), co-founder and CEO Elon Musk said (via YouTube), “I think in order for us to get to like, let’s say, ultimately getting like a USD 25,000 car, that’s something we could do.”
On various occasions since, Tesla indicated it would launch a USD 25,000 EV, and a driverless variant of the same. However, during the company’s Q4 2021 earnings conference call on January 26, 2022, Musk revealed the company had paused work on the former. The latter, initially referred to as ‘Tesla Robotaxi,’ broke cover as the ‘Tesla Cybercab’ two-door, two-seat coupe in October 2024.
On March 1, 2023, Tesla announced it would manufacture its next-gen vehicle at a new plant in Mexico, and it was widely anticipated that this referred to the USD 25,000 EV. The company planned to make the next-gen EV initially at Giga Texas, though, starting in H2 2025, Musk revealed during the Q4 2023 earnings conference call on January 24, 2024.
Reuters stated ‘Redwood’ as this product’s codename in an exclusive story the same day. According to a follow-up report Reuters released on November 6, 2023, Tesla was going to make this EV at Gigafactory Berlin-Brandenburg as well.
On April 5, 2024, Reuters published another exclusive claiming that Tesla had scrapped the manually-driven USD 25,000 EV and plans to launch only its fully autonomous variant (Tesla Cybercab). After the company’s stock took a hit because of this development, Musk responded on X saying “Reuters is lying.”
Fast-forward to October 23, 2024, Musk called the $25,000 car “pointless” during the Q3 2024 earnings conference call, indicating the company has indeed scrapped the long-promised conventional high-volume model, and was directing its energy towards launching the Cybercab.
I think having a regular 25k model is pointless. It would be silly. Like, it would be completely at odds with what we believe.
Elon Musk, co-founder and CEO, Tesla (Tesla Q3 2024 earnings conference call on October 23, 2024)
Tesla plans to build the Cybercab in two factories and aims to make at least two million units of the self-driving EV annually. The company plans to start its production in 2026 and launch it at a price of under USD 30,000 (including incentives).
Sub-30k Tesla Model Q to arrive in 2025?
On December 9, 2024, citing a Deutsche Bank report, The Wall Street Journal reporter Becky Peterson said on X that Tesla plans to launch a Model Q in the first half of 2025. Travis Axelrod, Head of Investor Relations at Tesla, reportedly met with Deutsche Bank for its Autonomous Driving Day on December 5, 2024, in New York City, where the product was discussed.
Citing the report, Peterson added that Tesla would make the entry-level car at a current factory on an existing production line. The company aims to price the new model under USD 30,000 (including the USD 7,500 clean vehicle tax credit). There’s no mention of a Tesla Redwood in the report, though.
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An automobile engineer by training, I’ve analyzed the global car market since 2005, with a keen focus on EVs since 2008. My journey in online automotive publishing spans 17 years, during which I have reviewed cutting-edge automotive technologies and interviewed leading global CEOs and vehicle developers.
