Tesla Makes One Thing Very Clear About $25k Model 2

Electric Vehicles / 27 Comments

Elon Musk has spoken.

If you're still hoping that Tesla will build a sub-$35,000 new vehicle we have some bad news. It's not happening, at least not anytime soon. Tesla CEO Elon Musk this week took part in the automaker's fourth-quarter earnings conference call with investors and other industry analysts and he clarified a few things. Among them the status of the so-called Model 2.

"We are not currently working on a $25,000 car," Musk said when asked about it. "At some point we will. But we have enough on our plate right now - too much on our plate frankly." What, exactly, is on Tesla's plate? For starters, the Cybertruck. Delayed again until 2023, the Cybertruck is turning into a nightmare as Tesla is struggling to make it affordable. The original plan was for pricing to begin at just under $40,000.

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"There's a lot of new technology in the Cybertruck that will take some time to work through," he said. "And there's the question of what's the average cost of Cybertruck and to what degree that is affordable." The original plan was to have the truck launched by the end of last year, though Tesla is no stranger to new product delays.

Musk made clear that the automaker will not be introducing any new models in 2022 or start building new ones, like the Cybertruck along with the second-generation Roadster and Semi, because it "wouldn't make any sense because we'll still be parts constrained."

At present, Tesla is focused on completing the construction of new Gigafactories in Austin, Texas and Berlin, Germany, while optimizing a limited supply of essential microchips.

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"If we had introduced a new car last year, total vehicle output would have been the same because of the chip constraints," Musk added.

Tesla's decision to take the year off for new product launches means it should have sufficient time to finalize engineering and tooling on those three vehicles. Musk noted the goal is to begin production on all three "hopefully next year." That's not a guarantee as it's also heavily dependent on whether Tesla can produce "more cars or fewer cars" this year in order to achieve maximum profits and deliveries. However, Tesla's most important new product isn't a vehicle, but rather the humanoid robot called Optimus it first showed last year. Tesla also hopes to have it in production next year.

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