Tesla Says ‘More Affordable’ EVs on the Way as Elon Spikes $25K Rumors Again

Tesla’s track record of keeping promises isn’t great, so take this with a grain of salt: The brand announced that “more affordable models” are on their way. We’ve heard about the on-again, off-again cheap EVs for years, but this time it sounds like an entry-level Tesla is truly in the pipeline. The question is what form it’ll take.

“Preparations remain underway for our offering of new vehicles—including more affordable models—which we will begin launching in the first half of 2025,” the company told investors during its third-quarter update. It added that it hopes to make electric cars “affordable for everyone.”

So, what will a more affordable Tesla look like? Your guess is as good as ours. “Affordable” is a relative term. Are we talking affordable compared to a Model 3, which carries a base price of $42,490 before incentives? Or are we talking affordable compared to a Honda Civic priced at $24,250?

The price difference between these two cars is not insignificant, and Tesla hasn’t revealed where its affordable car will land on this spectrum. On the one hand, the company has tried to cultivate a “premium” image for years, so we have a hard time imagining, say, a Model 1 aimed at the Nissan Sentra. On the other hand, its goal of making EVs “affordable for everyone” seemingly requires branching out into non-premium segments.

It’s crucial to remember that Tesla has historically gone to significant lengths to cut costs, and developing a new model from the ground up is an expensive project. While the dream of a standalone entry-level car will likely never die, the more realistic approach would be a Model 3 with less horsepower, less driving range, fewer features, and a big discount. Round two of the $35,000 Model 3, in other words.

Rummaging through the mountains of rumors hovering around Tesla’s much-hyped affordable car brings a handful of key facts to light. One is that Tesla purchased a large plot of land in Santa Catarina, Mexico for a new Gigafactory, though the project is currently on hiatus. Shifting production south of the border would allow the company to lower production costs without getting caught in the trade war with China. Keep in mind that this is pure speculation: Tesla hasn’t publicly announced what it will build in the plant, and we don’t know when construction will end.

Mexican officials might have beaten Tesla to the punch.

“The car that they want to launch [in Santa Catarina], which is the economy-focused model that will sell in massive amounts, is going to require a new production line,” revealed Samuel García Sepúlveda, the governor of Nuevo León, in an interview with Mexican publication Milenio.

Beyond that, it’s mostly source-less rumors and vague speculation. Tentatively called Project Redwood, the entry-level Tesla—assuming it still exists—is said to take the form of a compact crossover. It would allegedly ride on a new platform that’s cheaper to build than the architecture that underpins the brand’s current crop of cars, and a note sent to suppliers claimed that Tesla was planning to build about 10,000 units per week. Anonymous sources told Reuters early this year that Tesla engineers bought and stripped a Honda Civic to get a lesson on how to build a quality cheap car.

The rumor mill has huffed out a $25,000 base price on several occasions, and Tesla would likely have no trouble significantly increasing its annual sales here and abroad if it can hit that number. But, naturally, co-founder and CEO Elon Musk doused cold water on these reports during Tesla’s earnings call after the Q3 figures were released.

“Basically, having a regular $25,000 model is pointless. It would be silly. It would be completely at odds with what we believe,” Musk said. Instead, he stated that the Cybercab’s supposedly low cost-per-mile will make normal, cheap cars irrelevant. Whatever those “more affordable models” are, then, they sure don’t sound like anything we haven’t seen already.

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