Tesla is going to be squeezed. New EV startups and the major auto manufacturers have all geared up and are ready to release an onslaught of competition. But Tesla won’t be standing still. There are many aspects of Tesla’s portfolio that need to be fleshed out. One of the main ones is an entry-level sedan. Now, there comes word that a $25,000 Tesla is coming.

A third Tesla is planned for the gigafactory a report says

It has been teased before-even with an image seen in company promotions for hiring Chinese designers. So we knew it was in the works. With Tesla’s Gigafactory recently completed in Shanghai, an eco-assessment report indicates what has until now been veiled. A third Tesla is planned for the factory. The report says it will be between RMB 160,000 to RMB 200,000. That translates to between $25,000 to $30,000 according to Teslarati. 

This third model is a result of Tesla’s continuing fortunes finding favor with Chinese customers. Approval for the third car was approved last September with verification expected this March. According to the report, the base Tesla will be built on the Model 3 chassis.

A small, entry-level Tesla is all part of its need to expand its base and offer an affordable model. This should lay the groundwork for buyers to return for ever-more expensive models as the years go on and their incomes rise. Also, a smaller, lighter Tesla will more easily fit into congested downtowns.

Elon Musk has suggested an entry-level Tesla would arrive by 2024

Tesla founder Elon Musk has suggested in the past that an entry-level Tesla would arrive by 2024 or 2025. But it is always hard to pin down Tesla’s schedules with any confidence. With these latest leaks, it shows that those early estimates were way off.

The big question is will this new model be available in the US any time soon? A lot of this is dependent on assembly programs and how adaptable it is to current manufacturing facilities at Fremont, California, and upcoming plants in Texas and Germany. Shanghai is to capacity building Model 3s at its initial plant and at capacity building Model Ys at the expansion factory there. So to build anything else there means building another expansion. That and how will manufacturing blend into Tesla’s plans for the Cybertruck and a rumored SUV-like variant of the Model X? 

A smaller Tesla would sell well. But it makes more sense from a profit standpoint to move up the ladder to ever-more expensive models like the Cybertruck and an SUV as opposed to downmarket.