Tesla Model 2 coming in 2025

The March 1 Tesla Investor Day is now done dusted in the US and although the highly-anticipated Tesla ‘Model 2’ was nowhere to be seen, the US EV-maker confirmed the “next-gen” EV will be built at its newly announced Monterrey factory in Mexico by around 2025.

Tesla said it wants to reach annual vehicle production of 20 million units by 2030 and, to do so, it will need to expand its model range – to include the long-awaited Cybertruck and the upcoming small car that’s widely expected to be called the Model 2 – and build more factories.

After production kicks off initially in Mexico, Tesla’s all-new small car – digitally rendered here by our friends at Kolesa.ru – will be manufactured at its other ‘Gigafactory’ facilities in Germany, China and the USA.

“As far as a timeline goes, we’re going to go as fast as we can from left to right as always,” confirmed Tesla’s vice-president of vehicle engineering, Lars Moravy.

“[Tesla CEO] Elon [Musk] alluded to the fact that Mexico will build our next-gen vehicle but we’ll also be doing that at our other plants, so it’s really about getting them all up and running.

“We expect that to be a huge-volume product and we’re going to move that quickly over the next couple of years,” he added, suggesting a production start sometime by the end of 2025.

Other Tesla executives were less forthcoming about the new model, with Tesla’s chief of design Franz von Holzhausen, saying: “I'd love to show you what I mean and unveil the next-generation car, but you’re going to have to trust me on that until a later date.”

When Musk was asked for more details on Tesla’s ‘next-gen vehicle’ – the sub-frame, but not the final exterior design, of which was depicted in a slide show – he stated: “I think we’ll actually have to probably decline that answer. We will have a proper sort of product event, but we’d be jumping the gun if we answer your question.”

Tesla execs confirmed the company’s next EV will get an all-new electric motor that doesn’t employ any rare-earth materials and will exclusively use Tesla-designed electrical controllers.

The new compact electric car is also likely to take advantage of Tesla’s new ‘4680’ battery tech, which is claimed to deliver significantly improved energy density and therefore greater driving range.

It’s not entirely clear how small the new compact EV will be, but given Tesla expects to halve the manufacturing cost of its models, the Model 2 could cost less than $40,000 when it launches in Australia later in the decade, given the circa-$64,000 starting price of the top-selling Model 3 sedan.

The next-gen EV will be underpinned by Tesla’s third-generation platform, which will help make it cheaper to build than any of its four existing vehicles – the Model 3 medium sedan and its closely related SUV sister model, the Model Y, and the older and larger Model S and Model X, which remain unavailable to buy in Australia – because of reduced complexity.

Upgrades are coming for both the Model 3 and Model Y, but there’s still no firm news on the Cybertruck’s or Semi’s availability in Australia and it now appears unlikely we’ll see design or tech details on the Model 2 any time soon.

For everything you auto know about EVs, listen to carsales' Watts Under the Bonnet: the electric car podcast

Join the conversation at 

our Facebook page

Or email us at 

editor@carsales.com.au