Tesla Model 2 set for production next year as sub-£25k EV

Next-generation powertrain and battery technology will be crucial to keeping costs down too. Tesla touts a 75% reduction in silicon carbide for its next batteries and the eradication of rare-earth metals in its new motors.

No powertrain details have been revealed for the Model 2, but it is likely to follow Tesla’s other models and be offered in single- and twin-motor forms, with the potential for high-performance versions to be introduced later on.

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The Model 2’s platform is thought to be unrelated to that which underpins the larger Model 3 and Model Y, but it will be built using the same ultra-efficient gigacasting method, which breaks the structure into separate cast units in an effort to minimise the number of individual components and thereby its cost.

Initial production has been tipped for Tesla’s German factory near Berlin, a decision potentially made on the grounds that any smaller new model would be inherently geared towards the European market. Avoiding the cost of importing it from Tesla’s sites in Texas, Mexico or Shanghai will be another factor.

Musk has not been firm on a launch timeline for the new car but recently said he is “optimistic” about building the first car late next year.

Tesla is said to already be in conversations with parts suppliers for the new car and has acknowledged that its volume growth is expected to slow this year “as our teams work on the launch of the next-generation vehicle”.

The Model 2 is understood to be Tesla’s primary engineering focus and commercially it is much more important – and urgent – than the likes of the Roadster and Cybertruck.

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