Tesla has set its sights on the broader mass market globally with a $25,000 compact car named "Tesla Model 2" under development in China.
Tesla China president Tom Zhu recently confirmed this initiative, according to a MS Power User report. The Tesla Model 2, expected to be a hatchback, will be locally designed for the Chinese market but sold worldwide.
$25,000 'Tesla Model 2' reportedly to start trial production this year - https://t.co/lV6IoMYszL pic.twitter.com/QKrF4Id4vq
— MSPoweruser (@mspoweruser) August 9, 2021
A prototype of the budget vehicle has been completed, Teslarati sources said. Manufacturing such affordable cars is part of Tesla's aim to reach more global users and is the essence behind the establishment of its research and development center in China. This R&D Center will be the first such Tesla facility outside of the US.
Tesla China to Design, Develop, Test, Produce $25K Cars for Global Market
The center is located in the Tesla Gigafactory in Shanghai, China. Zhu said in February that the China R&D Center aims to "design, develop, and produce an original model in China, manufactured here and sold to the whole world," per MS Power User. The process, he added, would include "vehicle design, vehicle engineering, vehicle development, and vehicle testing."
Zhu further revealed details about the China R&D team working on the $25,000 vehicle, which Teslarati sources hinted to enter trial production by the end of 2021.
Elon Musk Excited About Compelling $25K TeslaEV Initiative
Tesla CEO Elon Musk himself confirmed the "exciting" initiative, announcing during Tesla Battery Day last year that Tesla will "make a compelling $25,000 electric vehicle that is also fully autonomous."
Musk also said the China facility was actually established for that purpose of "actually (designing) an original car in China for worldwide consumption."
The Tesla China R&D Center has over "20 professional laboratories (providing) very good conditions (for) engineers working toward the ultimate goal," Zhu further said in the MS Power User report.
Tesla had approved the compact vehicle in September last year and made product verification in March. A mass rollout is expected in early 2022.
Tesla China Expanding R&D Team for 'Model 2' Prototype
Teslarati reported that Tesla China has been expanding its local R&D team primarily for the trial production of the Tesla Model 2. These include openings for an "R&D Operations Specialist for the Prototype Shop," who would oversee the manufacturing of the prototype cars, powertrain, chassis, components and car body. It has received design submissions since last summer and has since started its team expansion.
Tesla was rumored to present the prototype vehicle at the Guangzhou Autoshow in November. The automaker earlier released an actual design drawing of a small electric hatchback, which was assumed to be the Tesla Model 2--confirming the budget EV's design directions and form factor.
A mass production of the $25,000 Tesla car would depend much on the availability of the company's affordable 4680 battery cells. Electrek reported that the automaker is facing difficulties in bringing the cheap EV batteries to market.
