Alleged cheapest Tesla Model 2 appears as smaller camouflaged Model Y lookalike at Giga Texas

When Tesla's chief designer Franz von Holzhausen said that the rumors about the death of the cheapest Tesla Model 2 were greatly exaggerated, he wasn't kidding.

While Tesla preferred to first announce the Cybercab two-seater built with a fraction of the Model Y parts, Elon Musk confirmed at several quarterly investor calls that a new, cheaper vehicle, is still on track for a 2025 release.

Before it was put on the back burner, Tesla's most affordable car was known tentatively as the Model 2 or Project Redwood. Elon Musk said that it would simply be a "smaller, to be certain" version of the Model Y, instead of some sort of hot hatch.

The Model 2 specs are expected to be better than those of the city-bound Cybercab, though, what with a 250-mile range from a 54 kWh battery pack, as well as larger dimensions and a rear seat bench.

Now, a drone overflight of Tesla's Gigafactory in Texas has revealed many movers and shakers at the sprawling complex, with new production lines coming up, and expansion of the paint shop. Needless to say, these expansions are probably for the start of the 2026 Model Y Juniper facelift production as Tesla prepares for its release next month, but some of it could also be dedicated to pilot production of the cheaper Tesla Model 2 as well.

In fact, the drone footage has revealed a camouflaged vehicle that looks like a shrunken Model Y, and Tesla has little reason to keep anything about a Model Y secret, now that it has announced the Juniper refresh, whose Performance version is probably not coming before the fall.

After Tesla's Model Y Juniper release date comes and goes, along with the respective production ramp, it will be free to focus on the Model 2 announcement. The unveiling event for Tesla's cheapest vehicle could thus happen in Q2 or Q3. The goal would then be to ramp up production for full-scale deliveries in the all-important holiday quarter, when Tesla can pad its sales numbers with an eventual Model 2 rather significantly.

The Cybercab is expected to cost below $30,000, and the Tesla Model 2 price could be thereabouts with the eventual federal subsidies, so it is bound to sell like hot cakes. Tesla will probably wait on its release until at least Q4, though, as it wouldn't want to cannibalize the Model Y Juniper sales.

Alternatively, the camouflaged Model Y lookalike's compact dimensions could simply be an optical illusion, or a test mule serving different engineering purposes. Elon Musk said that Tesla will be launching its robotaxi platform with owned and operated vehicles running on unsupervised FSD in Austin this June, so the camouflaged vehicle could be destined for that pilot program, too.

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