2026 Compact Tesla.
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Another day another rumor of a new cheaper Tesla model coming “soon”.
The last time we heard about something like this was late last year, just a few months ago. It was then rumored to be launched in the first half of 2025 and cost under $30,000. Even though Elon Musk had previously called a possible $25,000 new Tesla model “pointless”.
The project “Redwood” was even mentioned by Musk last year. “our current schedule shows that we will start production towards the end of 2025, sometime in the second half”. And “We’ll be sleeping on the line practically”. We all know the second part will not happen since he is now quite busy with “other projects”.
Yesterday we had a rumor about a cheaper version of the Model Y coming out in China next year and possibly being built in Berlin and the US later. Today we have yet more talk about a new tesla.
One that would not be a cheaper Model Y, but a new smaller Model, still “partially based” on the Model 3 but about 20% cheaper to produce. It would be built on the existing Model Y assembly line in Shanghai. With production expanding Germany and the US later. So far this is called Project E41. Unlike what Musk had said, production of the new car wouldn’t start until 2026.
If the 20% production saving is passed on to the price of the car, this could potentially start at around $36,000 in the US. Which is much more than what was expected for a new smaller cheaper Tesla. But would still be much less than the new $42,500 base price for the Model 3 since the shorter range cheaper trim is no longer available. model.
$36,000 or even $35,000 isn’t that great. Currently, the VW ID.4 already starts at $37,000. So does the Toyota BZ4X. Toyota already has a new cheaper model coming soon. So does Kia with the EV3 and Volvo with the RWD EX30. And more.
What Tesla needs is the $25,000 model Elon Musk describes as pointless.
However, what they really need right now is a more drastic move to save the whole company…