- A new report from Deutsche Bank says a sub-$30,000 Tesla is arriving next year.
- The bank is citing Tesla's own executive, which means this is probably true.
- Deutsche Bank is referring to the new product as a "Model Q," but that name isn't confirmed.
Tesla will launch a sub-$30,000 vehicle after tax credits early next year, according to a report from Deutsche Bank after the firm met with the automaker's Head Of Investor Relations. Analysts at the firm are calling it the "Model Q," though the name is in quotes and unofficial. But there are enticing new details about what this more affordable Tesla model might be, and its cost.
"The new Tesla model (we refer to as "Model Q") should launch in 1H25 and will be priced <$30k including subsidies (i.e., $37,499 if US EV tax credit goes away)," the Deutsche Bank report said.
Tesla itself has not confirmed this news. But InsideEVs has seen the Deutsche Bank investor report on Tesla's plans for 2025, and the firm is claiming that the information comes directly from Travis Axelrod, Tesla's head of IR. The new model will be built on the company's existing product manufacturing lines, saving the company from the difficult and costly process of spinning up a new facility.
Tesla projected to Deutsche Bank that the new models would increase volumes by 20-30% over the next year, though profits will likely dip as the company spends big to get new models out the door.
That's right: New models. Not model. Deutsche Bank also says a long-wheelbase three-row Model Y is planned for China, too. That'll be a nice add in what's becoming a much more contested market for the EV giant.
But the so-called "Model Q" is a much bigger story. We don't have further details, but Tesla CEO Elon Musk has repeatedly hinted at a more affordable variant of the brand's existing products. Instead of an all-new platform—and all of the bug-testing, money and time that takes—he's suggested that the company can cut costs out of existing products.
Given how stripped-down the Model 3 and Model Y already are inside, it's unclear what would be cut. The proposed Model Q could use cheaper or smaller batteries, less powerful motors or perhaps an even cheaper interior. Tesla could also cut out the "Full Self-Driving" hardware, but the dishonestly named software is so key to the company's current pitch as an AI company that it's hard to imagine it happening.
Either way, Deutsche Bank claims that the company plans to sell it for under $30,000 after the federal tax credit is applied. That means it'll be under $37,500, putting it right in the neighborhood of the $35,000 Chevy Equinox EV. With tax credits, the Equinox can be had for under $28,000, and it accomplishes that in part thanks to a low-power front-wheel-drive variant that's far cheaper than the AWD version.
But the Model Y and Model 3 are already sold as single-motor cars. The base Model 3 starts at $44,130 with destination before credits, while a rear-wheel-drive Model Y goes for $44,990. Cutting costs by another $7,000 will be tough, but the company does have options. The "Standard Range" Model 3 and Model Y no longer exist, and cutting the battery size would surely drive down costs. The Model Q could also be smaller, and offer fewer seats. Fewer parts could also decrease production costs.
For now, it's unclear. But for the first time, we have what is effectively official confirmation that a sub-$30,000 Tesla will be here soon. While the news isn't coming straight from Tesla, the brand's Head of IR wouldn't be telling Wall Street about a new model if it wasn't serious about bringing it to market.
I just hope Tesla can hit its deadline. But that's not usually a good bet to make.
Know anything about the "Model Q?" Drop me a line: Mack.Hogan@insideevs.com.
