The Tesla Model Y may be the best-selling car-shaped vehicle in the world right now, but the brand itself is not in the clear. Buyers are thirsty for reasonably priced EVs. Elon Musk has confirmed that the brand plans on meeting that demand with a $25,000 EV, a car that some on social media are calling the Model 2. However, an analysis from the investment banking firm Evercore, asserts that the brand likely won’t be able to deliver the car in substantial volume until at least 2027.
According to Bloomberg, the report is a bit more articulate than a simple yes or no. The team of Evercore analysts responsible, led by Chris McNally, asserts that the brand could officially start production on the model in late 2025. But, he doesn’t see Tesla Tesla meeting its goal of 1 million units of the Model 2 in 2026 as realistic. The ramp-up to satiate demand and get the factories that would produce the Model 2 online will take a while. Evercore thinks 2026’s numbers would be closer to 500,000, and Tesla won’t be able to get into the swing of manufacturing and hit that 1 million per year mark until 2027.
However, McNally has been bullish on Tesla in the past. He’s been skeptical of Tesla’s stock ability to grow since at least 2020. Tesla’s stock has increased 310% since then. But McNally’s analysis isn’t unprecedented. Earlier this week Wells Fargo downgraded the brand, exclaiming that it was a “growth company with no growth,” claiming its price cuts aren’t having the same effectiveness as they once. Prices are falling faster than the company’s sales rate is increasing. Some of this stagnation is due to a somewhat stale product line amongst its volume sellers, the Model 3 and Model Y. If Tesla wants to continue to grow, it will need a new model.
But, it’s not clear what form Tesla’s Model 2 will take. It will be cheaper to make, and potentially eschew Tesla’s driver assistance technology entirely. We still haven’t heard much from Tesla concerning the potential affordable EV aside from a few rumblings on X (Twitter) from Elon Musk. If Tesla wants to put a cheap EV in production in 2025, we hope we’re able to see it soon.