USD25K Tesla is not coming

USD25K Tesla 'Model 2' Reality Check

Tesla, like all carmakers, is still addicted to expensive electric vehicles.

The production of a USD25K Tesla (sometimes referred to by analysts as the "Model 2") anytime soon is not.

Tesla is too focused on the Cybertruck (will not be cheap) and ramping up production of the refreshed Model 3 to worry about an affordable car. And there's another reason...

To lower prices, Tesla now leans on federal tax credits and state rebates in the U.S. (otherwise known as a government discount.) Problem is, government incentives aren't permanent, aren't consistent from state to state, and come and go like the seasons.

(Note: The combined federal tax credit and state rebate potentially amounts to USD15,000 in California.)

On the other hand, there are cheap EVs like the Chevy Bolt, which starts at under USD30K and is eligible for the same tax credits and rebates that the Model 3 is.

While Tesla zealots on X/Twitter might think a USD40K Model 3 is cheap, the other 95% of America doesn't.

Many were expecting Tesla to lower the price of the refreshed Model 3 "Highland" as a result of cost-cutting. But the price has actually increased (Wall Street loves this, btw.)

But, wait, that USD25K Tesla is coming, Tesla boosters say. They often point to the Austin Gigafactory, where Tesla is developing new processes, equipment and tooling to build better cars more efficiently.

But just don't expect this to be applied to a USD25K car anytime soon.

Although Tesla continues its relentless pursuit of cost cutting that doesn’t necessarily translate to cheaper cars. The goal is to make money, after all.

Not convinced. Fine. Meanwhile Tesla zealots will take out a car loan and flock to the USD40K Model 3 or the coming (and pricier) Model Y refresh. While the rest will buy the Chevy Bolt or other brands.