New Tesla ‘Model 2’ hatchback teased in latest image – second new model also in the works

• Sits below Model 3 as entry-level Tesla
• Possible £25,000 starting price
• Expected to arrive around 2025

Tesla has released a video including a teaser for the upcoming ‘Model 2’ hatchback – a car set to be the most affordable offering in Tesla’s EV lineup. The car has been highly anticipated for quite some time, and was expected to get a full reveal in this year’s Tesla Investor Day in spring, but the brand appears to be holding its cars close to its chest, waiting until the design and engineering process is complete.

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When giving a speech a the 2023 Annual Shareholder Meeting in the US, Elon Musk confirmed the brand was actively working on and designing a new product, with an image of the new car’s silhouette appearing behind him on stage.

There’s a common family resemblance with the Tesla lineup, and the teased car is no exception – the silhouette reveals a similar outline and shape to the Model 3 saloon and Model Y SUV, albeit with a more abrupt rear end expected of a smaller hatchback or saloon.

Interestingly, Musk also hinted that Tesla is working on not one, but two new models. Like with the release of the Model 3 and Model Y, the brand could be set to launch a pair of closely related models.

While still unconfirmed, it’s likely that the models will comprise a small affordable hatchback (the car likely to be badged ‘Model 2’) and a compact SUV variant based on the same underpinnings.

Our exclusive renders show how the baby Tesla could look, taking inspiration from larger cars in the range, the new baby Tesla is likely to adopt the brand’s trademark minimalist styling, with swooping curves in the bodywork which will, no doubt, be formed in a wind tunnel to maximise efficiency.

The Model 2 is expected to be more compact than any other Tesla before, using a smaller battery with a shorter range than the rest of the lineup. The brand hopes to produce the car for half the cost of the Model 3 saloon, and Tesla powertrain boss Colin Campbell announced at the Investor Day that no rare earth materials will be used in the production of the new vehicle’s motor. It will also be compatible with any battery chemistry, allowing for better flexibility when it comes to sourcing materials for the battery pack.

Not only will the ‘Model 2’ be a more affordable option in the brand’s lineup, but it will also aim to be more affordable to live with. Tesla CFO Zach Kirkhorn says the cost of ownership per mile over five years will be considerably less than a base Model 3 or Toyota Corolla. If this is the case, the Model 2 could represent a huge leap forward for democratising EV ownership for many buyers.

A possible £25,000 list price would put it in direct competition with the MG4 EV as well as making it around £10,000 cheaper than a Volkswagen ID.3 – although, it remains to be seen whether this will be possible, as even in its home market, the Model 3 has since climbed significantly higher than its $35,000 base price when it originally debuted in the US.

Of course, the car is still a way off for now – Tesla has a reputation for taking a long time to put new models in production, namely the forthcoming Cybertruck and Tesla Roadster supercar which have faced repeated delays. We expect the car to make its debut sometime around 2025, by which stage the EV market is forecast to have many other affordable options available, such as the upcoming Fisker Pear.

Can’t wait till 2025 but still want a low-cost EV? Check out our list of the top 10 cheapest electric cars