Autocar is one of the most respected news organizations in the automotive space. It recently reported that Tesla’s affordable car priced at around $25000 or less, likely named something other than Model 2, will be built in Germany starting next year. This makes sense because small affordable cars are popular in Europe and would save on shipping costs.
This new car, code-named Project Redwood, is crucial for the company to compete with rivals like BYD, which took the top electric car manufacturer spot in late 2023.
Tesla predicts huge sales figures for the Model 2, but some find this unrealistic. The pressure to make cheaper electric cars comes from both consumer demand and competition from China, where production costs are much lower.
Moreover, now, Chinese companies are casting covetous eyes on foreign markets, where industry leaders see a flood of cheap Chinese cars coming ashore in the near future. BYD is even building its own fleet of ocean-going car carriers to deliver its cars to foreign markets, this could threaten Tesla’s lead.
Even if the company builds a cheap Model 2, it’s unclear if it can compete with the price of Chinese models. Additionally, Elon Musk is known for over-promising and under-delivering. For example, Tesla Semi production was announced in 2022, but real production hasn’t begun. Some believe Musk prioritizes stock prices over reality. While Tesla has achieved great things, it would be nice to see them deliver on promises sooner rather than later.
Reference- Reuters, Autocar, Clean Technica, Tesla