Tesla Model 2 could become a compact version of Model Y

Tesla is preparing for a significant expansion of production and will focus on the new

budget model, which plans to release onfour million a year, according to the Notataslaapp portal, citing Chinese sources. According to them, the new relatively inexpensive Tesla (sometimes referred to as "Model Q" or Model 2) will be a compact version of the Model Y, with a price tag of around $25,000. To do this, Tesla is aiming to halve manufacturing costs compared to the current Model 3 or Model Y.

Tesla plans became clearer during Investor Day inthis year when the company shared details of its Monterrey plant in Mexico. The factory will adopt the "Lego" production method to reduce production costs for Model Y by 50%. The budget electric car model was first mentioned by CEO Elon Musk during Battery Day 2020. Lower prices have proven to be effective in stimulating the market, as evidenced by the strong increase in sales since the Model 3 price drop earlier this year. The launch of Tesla's budget electric car is part of the company's strategy to achieve annual sales of 20 million vehicles.