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A Tesla Model 2 or other entry-level electric vehicle (EV) in the Tesla lineup seems like a logical step for the marque. However, after several price cuts, the existing Tesla Model 3 is already a more affordable affair for potential Tesla EV owners than it once was. So, with the 2023 Tesla Model 3 and the facelifted 2024 electric car at more attainable price levels than before, is a Tesla Model 2 even necessary?

What is the cheapest Tesla?

The Tesla Model 3 boasts the cheapest price of the marque’s cars in 2023. Specifically, the standard, single-motor Model 3 starts at around $38,990. Further, the Model 3’s grippier upper trims start between $45,990 and $50,990.

TrimStarting price
Model 3$38,990
Model 3 Long Range$45,990
Model 3 Performance$50,990

Year-over-year, the price of a used Tesla Model 3 dropped nearly 30% from 2022 to 2023. However, even with increasing accessibility, the Model 3 leaves a gap that can only be filled by a lower-cost EV, namely a Tesla Model 2 or similar platform. 

Is a Tesla Model 2 necessary with the Model 3 in the lineup?

A blue Tesla Model 3, the current cheapest car in the Tesla lineup before the Model 2 arrives, cruises on a sunlit road.
A pre-facelift Model 3 | Tesla

The long-discussed Tesla Model 2 EV will occupy the spot of the car with the lowest entry-level price in the lineup. While decreasing Model 3 prices might open the budget-minded Tesla electric car up to a widening consumer base, it still leaves many potential buyers waiting for a sub-$30,000 Tesla.

Tesla is quick to tout the potential savings an owner could enjoy with a base Model 3, but it’s still not enough to eliminate the need for a lower-cost option. For instance, the EV manufacturer says that a Model 3 has the potential to save its owner $3,000 in fuel costs over the first three years of ownership. Paired with a $7,500 federal tax incentive, the single-motor Tesla electric car could cost closer to $28,500. However, that figure doesn’t take driving habits or maintenance into account.

Will Tesla make a Model 2 EV?

A Tesla Model 2 is a logical next step for Tesla. It will undercut the price of the cheapest Tesla in the lineup, the Model 3. Furthermore, it would compete with popular economy EVs like the Chevrolet Bolt EV, a popular option for potential owners with a sub-$30,000 budget. 

However, it’s unclear whether Elon Musk and the powers that be at Tesla will call the electric car “Model 2.” The moniker is the result of the constantly churning rumor mill that is the internet. I know; imaginative, right? Still, a “2” could work in Musk’s current naming scheme. After a Model 2 rolls out of a Gigafactory, the lineup could be read as “2-S-3-X-Y.” Cheeky. 

How much will the Tesla Model 2 cost? 

To be competitive with the most budget-friendly electric cars on the market in 2023, the Tesla Model 2 will have to cost between $25,000 and $30,000. Of course, any iterations with more extended range, dual-motor applications, or trim upgrades will increase the EV’s starting price.

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