Cheaper Model 2 release to precede Roadster 2 as Tesla shifts focus to mass EV adoption

Instead of a "flying" Roadster 2 (in the words of Tesla's design chief) whose preorders reopened last year, Tesla may release its mass market Model 2 first, again according to its design head Franz von Holzhausen. Pressed on the Roadster 2 launch, he admitted in an interview that the project may have gone to the back burner at Tesla as, apparently, "mass electrification" is now the automaker's main goal.

We’re developing the car. I think you know we have priorities as a company, and the priorities are mass electrification. And Roadster is not a mass product. So, unfortunately, you know it takes its kind of position, but we are working on it in earnest. And I think the time that we’ve taken had enabled us to really improve on basically every metric that we set out to establish when we first debuted that.

Such a target strategy can only be achieved with a mass market electric vehicle like the Model 2 which, according to Elon Musk, will be smaller than the Model 3, but cost twice less to manufacture. Tesla is exploring several avenues to reach the coveted US$25,000 Model 2 price point such as removing part redundancies and upgrading production facilities. In the previous 5-year period, it managed to more than halve its average production costs per vehicle from US$84,000 to the US$36,000 a Tesla costs to make now.

According to its head of investor relations Martin Viecha, in the current 5-year period that runs until 2027, the most important factor for cutting production costs yet again is increasing the share of newer and more efficient Gigafactories such as those in Texas, Shanghai, or Berlin, in the overall production mix. This has to happen while Tesla is upgrading its legacy production facilities and opening new ones, too.

The rumored Mexican Gigafactory, for instance, is reportedly going to serve as a hub for Tesla Model 2 production with up to US$10 billion investment when all of its expansions are finalized. The Gigafactory in Nuevo León is reportedly going to make parts for the Cybertruck and Model Y at first, given its proximity to Giga Texas.

However, "in future phases it would be a new model with a lower cost than the current ones," according to local officials privy to the plans who may ultimately be referring to the Model 2 production which Tesla's design chief informed has taken precedence before the Roadster 2 launch.

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