NEWSLETTER
The electric vehicle maker is celebrating a highly anticipated investor day on March 1. The Model 2, a cheaper, low-cost vehicle, could be launched, experts speculate.
The bets are open.
In a little less than 48 hours, Elon Musk, the capricious and charismatic CEO of Tesla (TSLA) – Get a free reportwill make a highly anticipated presentation by the markets, the automotive industry and consumers.
During this Tesla Investor Day, scheduled for March 1, the king of techno promised announcements for a future that is “bright.”
At the moment, there is only one certainty: that day he will reveal volume 3 of Tesla’s Master Plan. the master plan It is the mission that Musk assigned to Tesla, that of transforming transportation and saving the planet from dying from pollution.
A Tesla Model 2?
The rest are speculations fed by the billionaire himself. For example, in recent weeks it has spread various information about the expected Cybertruck, Tesla’s first truck with a futuristic design, suggesting that it will present the promised model for mass production on March 1.
Production of the Cybertruck, whose order book is full, will start later this year.
Musk also hinted in a cryptic message that he might introduce a new vehicle. In fact, he has retraced Tesla history emphasizing flagships from the Roadster to the Cybertruck, the Model 3 sedan, the Model S luxury sedan, the Model X luxury SUV, and the Model Y SUV. launched these models, Tesla began, last December, to produce the light heavy Tesla Truck, which will be followed shortly by the start of production of the Cybertruck.
This is where it gets interesting since Musk replaced the arrows with three dots… These three dots suggest that a new vehicle will follow the Cybertruck compared to the past where he traced it with arrows.
The company has not released a new vehicle since 2019.
For many experts, Musk will introduce the Model 2, a vehicle whose manufacturer’s suggested retail price (MSRP), the price that the manufacturer recommends to dealers or stores to sell a vehicle, will be $25,000.
“With Musk’s ‘Master Plan 3’, we expect a lot of updates to the product roadmap which will likely include Cybertruck updates/timing, Semi Truck delivery updates, and the roadmap for what will ultimately be a vehicle in the $25k range. Big focus on global production ramp for TSLA,” said Wedbush analyst Dan Ives.
cheaper to produce
A $25,000 car would allow Tesla to capture 80% of the auto market that currently eludes the Austin, Texas-based group.
“We expect the Model 2 to be 15% shorter, 30% lighter and have a 25% smaller battery than the Model 3,” said Pierre Ferragu, an analyst at NewStreet Research.
The analyst, who is a Tesla bull, explained that the Model 2 makes sense for Tesla even from a cost perspective. It would cost less to develop and produce, justifying its $25,000 price tag.
“We expect Model 2 to be 37% cheaper to build than Model 3. Half of the difference stems directly from the smaller car, the other half stems primarily from innovations in design, architecture and manufacturing. “.
The difference from the Model 3, for example, Tesla’s entry-level vehicle today whose base price is $42,990, comes from the fact that, for example, the labor cost is $2,400 for the Model 3 while That would be $1,200 for the Model 3. Model 2, Ferragu has calculated. In total, the manufacturing costs of a Model 3 amount to $8,500, against $5,100, the analyst said.
The Model 2 would bring Tesla closer to its goal of producing 20 million vehicles a year by 2030 and would venture into emerging markets like India. The vehicle would also become a direct competitor to the Toyota Corrolla whose starting price is $21,550according to the Japanese automaker.
“Implications: $TSLA can maintain a gross margin heading towards 30% for cars, with Model 2 and FSD increasing in the mix. Also, with an MSRP of $25,000, Model 2 addresses 80% of the automobile market and paves the way for Tesla to surpass 12 million units and auto revenue of $400 billion by 2030,” Ferragu said.
FSD stands for Full Self-Driving, which is the advanced driver assistance feature standard in Tesla cars, Autopilot. It currently costs $15,000.
Ferragu added that: “Because of the IRA, to get a $25k cost to the customer, Tesla can sell it for $32,400 in 
.”
IRA is the Inflation Reduction Act that encourages mass adoption of green vehicles by extending the $7,500 federal tax credit through 2032.
Musk has promised that Tesla will produce 20 million vehicles a year by 2030, making it the world’s largest automaker. Last year Tesla produced 1.37 million vehicles. The Model 2 would allow the company to equip itself with the means to achieve its objective.
