Given the overnight success of the Volkswagen ID.3 and the rush of European buyers looking for inexpensive EVs, a Tesla positioned below the Model 3 would seem like a natural next step in the company’s lineup as its expands its production footprint around the world. With the EV market surging in Europe over the past year, many are still looking to Tesla to lead when it comes to lower end of the price spectrum, as challengers from Renault, Skoda, SEAT, Volkswagen, Nissan, and Dacia appear on store shelves.
Autocar reports that the Fremont-based automaker is indeed working on a hatchback priced around $25,000, scheduled to go on sale in 2023. The publication confirms that the previously undisclosed but long-speculated model will have a range around 250 miles, and will also rely on a new type of battery technology (the 4680 cells) that will cut battery production costs in half, due to come online in 2022. Autocar indicates that the upcoming hatch will be aimed pretty squarely at the Volkswagen ID.3.
“About three years from now, we’re confident we can make a very compelling $25,000 electric vehicle that’s also fully autonomous,” Elon Musk disclosed during the automaker’s Battery Day in 2020.
An EV positioned below the Model 3 has been rumored for some time, but external factors have begun to favor its development only recently, driven by a sudden surge in demand for low-priced EVs in Europe and China, as well as Tesla’s own growing production capacity, months ahead of the opening of the Berlin-Brandenburg plant. It’s also worth noting that the Cybertruck is the only truly volume model in development at the moment, with the Semi and Roadster being either too niche or too commercial.
While the Cybertruck may do well stateside, even while facing half a dozen competitors from Rivian, GM, Ford, and others, it’s not expected to make the charts in Europe or China, due to the traditional aversion to that body style in those markets. So as promising as the Cybertruck may seem at the moment (to some), its debut would be a non-event in Europe and China, while the Roadster would likely be too pricey and too small-volume to actually generate a profit.
This leaves a sub-Model 3 offering as the next logical step for the automaker as it seeks to maintain its market share in Europe and China, where such a model should be very welcome.
We’ve previously speculated regarding what such a hatch could look like, picturing it as a truncated Model 3-based vehicle in the rendering above. But in reality such a model could be a clean-sheet design that might not be based all that closely on the Model 3, given the fact that the smallish sedan will be somewhat aged by 2023. That approach may seem like the least expensive one, keeping most of the footprint of the Model 3 but altering the rear half of the car to feature shorter rear doors and a hatch, and no doubt the Model 3’s interior could well be carried over into a 2023 hatch with minimal alterations. The real cost savings in the production process could come from the new type of battery that Musk mentioned during Battery Day 2020 as well as further decontenting of the interior, along with a mostly camera-based semi-autonomous driving systems promised by the Tesla CEO.
The slightly delayed Berlin-Brandenburg plant would be a natural production site for a sub-Model 3 vehicle, expected to come online later this year, but Tesla has also hinted in the past that the Shanghai plant would produce the upcoming hatch and has even asked for prospective designs in China to be submitted.
By the time the $25,000 model debuts, there will be no shortage of competitors in Europe and China, so time is not on Tesla’s side. The EV hatch is arguably a model that Tesla needed on the market about a year ago, but was consumed by the start of Model 3 production in China and other matters, including the Texas plant that will produce the Cybertruck. Still, given the growth of demand for EVs, the upcoming Tesla hatch should be a success even if the profit margins for the company may not be the most generous.
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