Cheap Tesla model may be a ‘2027’ thing predicts analyst

Tesla is working on a new cheap EV model for next year but Evercore analyst says that the model is more likely to see full rollout in 2027.

Chris McNally, Analyst at Evercore Investment firm said that “Tesla increasingly is a 2027 story” in a report published on Monday. The analyst shared a doubt over the development of this new low-priced model referred to as Model 2.

McNally predicts that Tesla could deliver more than 600,000 units in 2026 and may not reach 1 million units.

The report also reveals a few key details about this model. Its bill of materials (BOM) will decline from $28,000 to $20,000 and will have 250 miles of range with no glass roof.

McNally also believes that the driver-assistance hardware would cost about $2,000 to $3,000.

Production:

In an interview with Sandy Munro last December, Elon Musk CEO of Tesla mentioned that the company is “working on a low-cost electric vehicle that will be made at a very high volume”.

The electric vehicle (EV) industry is going through a market transition but a high price point is still a major hurdle for new customers. Therefore, bringing cheaper models has now become a priority for carmakers but its production is a big challenge.

Musk said that the car will use new manufacturing technologies “That car will blow people’s minds. It’s not like any car production line that anyone’s ever seen”.

The production of the car will take place in Austin Texas facility and it will expand at Gigafactory in Mexico.

Earlier this year during the 2023 full-year earning call, the Tesla chief also said “We’ll be sleeping on the line practically”. However, the EV maker is believed to be taking some time to reach high-volume production capacity.

Talking about the launch date, Musk said that that car could be mass-produced somewhere in the second half of 2025. From this point of view, the car could hit the market by 2026.

(source – Bloomberg)