Elon Musk calls $25,000 Tesla Model 2 'revolution' in low-cost car manufacturing with 'very high' production volume

Despite all the brouhaha surrounding the Cybertruck launch last week, Elon Musk found time to sit down for his second interview with Sandy Munro. Elon and the Teardown Titan talked shop about the Cybertruck's  new 48V low-voltage architecture that made its true steer-by-wire system possible, but Sandy wanted to take Musk in other interview directions, too.

One of them was Tesla's upcoming $25,000 car, tentatively named the Model 2. Elon Musk was very careful not to share anything about Tesla's cheapest car that would constitute a forward looking statement about volumes and such, but he did spill some beans that hint at the advanced stage of the project.

Elon Musk confirmed that he is now reviewing the Model 2 production plans on a weekly basis since Tesla's first $25,000 car will be built in the US, right at Giga Texas where the $100,000 Cyberbeast is being assembled, too. The Gigafactory in Mexico where the Model 2 production was supposed to start first just won't be ready in time, he remarked.

Tesla Model 2 release date

Given that the latest rumors peg Giga Mexico ready for production in 2026, this means that Tesla wants to release the Model 2 before that, perhaps in 2025 when the promised Cybertruck production ramp to 250,000 units per year is already a fact. This way it will have more than five years to capitalize on the federal EV subsidies, too.

The Model 2 may use some of the processes Tesla will test in mass production with the Cybertruck, such as body gigacasting, so it could apply everything learned to its first mass market vehicle.

In fact, Elon Musk is so proud of the Model 2's assembly process that Tesla has come up with, that he claimed several times during the interview that this is the most interesting part about the upcoming $25,000 Tesla.

High volume, low Tesla Model 2 price

"We are obviously working on a low-cost vehicle that will be made in very high volumes," he confirmed, and "the revolution in manufacturing that will be represented by that car will blow people's minds." "It is not like any car production line like anyone's ever seen," he added, since it will showcase "a level of production technology that is far in advance of any automotive plant on Earth."

It better, as the latest rumors are that Tesla plans to produce up to 4 million Model 2 vehicles per year when production is fully ramped, first in Giga Texas, then in Mexico, and then in Berlin and possibly Shanghai.

As a reminder, the Model 2 is expected to look like a smaller Model Y, and cost between $22,000-$25,000 before subsidies. It could be powered by a 53 kWh LFP battery which, given its lighter weight, could propel it to over 300 miles on a charge still. Elon Musk also got sold on the futuristic Model 2 design when coming around the corner, but apparently all those features will pale in comparison with the manufacturing process that would make the price tag of the cheapest Tesla possible.

Get the 48A Tesla Wall Connector with 24" cable on Amazon