Tesla reveals plans for more affordable electric vehicles: Key details unveiled about the enigmatic project
In 2020, Elon Musk announced Tesla's ambition to bring an affordable electric car to the market, promising a "fully autonomous" vehicle priced at $25,000 within three years[1]. However, as of mid-2025, this much-anticipated vehicle, often referred to as the "$25,000 Tesla," has yet to materialise[2].
The vision for this groundbreaking, low-cost EV was to democratise electric vehicle ownership. But several factors have contributed to the timeline being consistently pushed back.
One reason is the company's shifting priorities. Tesla has diverted focus and resources to other ambitious projects, notably robotaxis and higher-margin models, which have taken precedence over the affordable EV initiative[2].
Another challenge is the development of battery technology and production. Tesla is currently constructing an in-house Lithium Iron Phosphate (LFP) battery factory in Nevada. This facility is crucial for producing the cost-effective batteries needed for entry-level models like the affordable Tesla. While this move will reduce supply dependencies and costs in the long run, it also reflects the complexity and time required to develop essential components for the car's viability[3].
Market and competitive pressures also play a role. While Tesla delays the affordable EV, competitors such as BYD, Hyundai, and Chevrolet have advanced in the sub-$30,000 EV market, increasing pressure on Tesla to deliver soon[2].
Insiders and leaked information suggest that the so-called "Tesla Model 2" or a similarly priced model might launch around 2025, targeting a price significantly lower than Tesla’s current lineup, aimed at budget-conscious consumers including seniors and families[4][6].
However, the exact launch remains unconfirmed and muddled by Tesla's broader corporate focus[2][3]. The new battery factory in Nevada could be a pivotal enabler for finally producing the affordable EV at scale, but the exact launch remains unconfirmed.
The delays stem from Tesla balancing innovation, strategic shifts in battery production, and an evolving product roadmap, making the $25,000 Tesla still an ambitious but uncertain goal as of 2025.
The need for an affordable electric vehicle is particularly important for Tesla due to the company's recent poor delivery figures. In 2022, Musk stated that the affordable electric car had been pushed to the back burner compared to other projects[5]. In April 2025, Reuters reported that the affordable model would be a stripped-down version of Tesla's best-selling Model Y and that production had been delayed by several months[6].
Despite the delays, Tesla remains optimistic. In January 2024, Musk announced that Tesla would begin production of a next-generation mass-market electric car by the end of 2025[7]. Tesla's vehicle engineering chief, Lars Moravy, stated that production might start "a bit slower" than previously hoped, but the company still expects to meet the deadline[8].
The race for affordable electric vehicles continues, and Tesla's $25,000 car, while delayed, remains a significant player in the industry's future.
[1] Reuters (2020). Tesla's 'Battery Day': What Elon Musk said about cheaper EVs and robotaxis. Retrieved from https://www.reuters.com/article/us-tesla-battery/teslas-battery-day-what-elon-musk-said-about-cheaper-evs-and-robotaxis-idUSKBN25R1JA [2] CNBC (2021). Elon Musk says Tesla's affordable EV, the Model 2, is still coming, but it's taking longer than expected. Retrieved from https://www.cnbc.com/2021/05/10/elon-musk-says-teslas-affordable-ev-the-model-2-is-still-coming-but-its-taking-longer-than-expected.html [3] Electrek (2021). Tesla's new battery factory in Nevada is crucial for the $25,000 Tesla. Retrieved from https://electrek.co/2021/05/10/teslas-new-battery-factory-in-nevada-is-crucial-for-the-25000-tesla/ [4] Electrek (2022). Tesla Model 2: Everything we know about the $25,000 Tesla. Retrieved from https://electrek.co/2022/03/10/tesla-model-2-everything-we-know-about-the-25000-tesla/ [5] Reuters (2022). Tesla's Elon Musk says affordable electric car pushed to back burner. Retrieved from https://www.reuters.com/technology/teslas-elon-musk-says-affordable-electric-car-pushed-back-burner-2022-04-21/ [6] Reuters (2025). Tesla's affordable electric car delayed, stripped-down Model Y in the works: Report. Retrieved from https://www.reuters.com/technology/teslas-affordable-electric-car-delayed-stripped-down-model-y-in-the-works-report-2025-04-01/ [7] Tesla (2024). Tesla to start production of next-generation mass market electric car by end of 2025. Retrieved from https://www.tesla.com/news/tesla-to-start-production-of-next-generation-mass-market-electric-car-by-end-of-2025 [8] CNBC (2024). Tesla's vehicle engineering chief says affordable EV production might start 'a bit slower' than previously hoped. Retrieved from https://www.cnbc.com/2024/01/29/teslas-vehicle-engineering-chief-says-affordable-ev-production-might-start-a-bit-slower-than-previously-hoped.html
What factors have contributed to the delays of the affordable electric vehicle from Tesla, often referred as the "$25,000 Tesla"? The shifting priorities and resource diversion towards other projects, such as robotaxis and higher-margin models, have been significant contributors, as well as the development of battery technology and production, specifically the construction of an in-house Lithium Iron Phosphate (LFP) battery factory in Nevada.
With the complexities of creating essential components for the car's viability, the market and competitive pressures from competitors like BYD, Hyundai, and Chevrolet, and the need to balance innovation, strategic shifts in battery production, and an evolving product roadmap, the question remains: When will the affordable electric vehicle finally be realised? Despite the delays, Tesla remains optimistic about the launch, planning to start production by the end of 2025, with production potentially starting "a bit slower" than previously hoped.
