by Wallace Wyss –
The Model 2 is not a car. Officially there’s no Model 2. But it is the one car Tesla needs most to blunt the European, Chinese and Big Three efforts at electric cars.
Tesla has a lot of irons in the fire– the Semi, the Cybertruck, the Roadster but paramount should be the yet-to-be-named $25,000 USD Tesla.
It is needed because it will likely underprice all the competition (except Chinese) and start a whole new legion of Tesla fans. Right now Teslas are upper middle class cars but offering one at $25,000 could be a game changer.
Styling drawings from various sources indicate a car that is not much more than a grille-less Toyota Yaris. It is more of a challenge to design a low price car with style than a mid-price or high price car.
It will be a compact hatchback to challenge the VW ID.3 (not in the US yet) and Nissan Leaf. The big selling points will be price, and then range. If Tesla can crack, say, 400 miles on range, that alone will be the reason to buy it. The ID.3 58 kWh battery produces a 261-mile range, while the 77 kWh equipped version is more impressive with a 341-mile range on a single charge.
Besides blunting the competition, Tesla wants the $25,000 car to provide a lower first step for those who want to start climbing the Tesla staircase.
Autonomous driving the Magic Key
Tesla is constantly inferring that they have the Magic Key to Tesla dominating the economy car sector–autonomous driving. Right now it’s not legal to have fully autonomous cars in the US. Likely Tesla will design the smallest Tesla to be fully autonomous, even to the point of having a version with a disappearing steering wheel, accelerator pedal and brake pedal but until a case goes to the Supreme Court to decide who’s at fault if an autonomous car has an accident, with no “driver” then it might be decided the fault lies with the car builder. Tesla can’t press the button at HQ that allows the car to run fully autonomously.
Legacy automakers, (using the now derogatory phrase to describe traditional) are designing autonomous driving concept cars with retracting pedals and steering. But not outing hard to legislatively pave the way for it Tesla is thinking ahead and realizes this could open the car market to millions who don’t want to drive, just be chauffeured there.
One way Tesla can have it both ways is to play it safe by building different models for different countries–in countries that require a steering wheel and pedals, so be it but if Tesla can find one country–just one –that allows full autonomy they could make it especially attractive to buy that model.
Tesla Autopilot
Then, when the year’s accident statistics are compiled in that country and the full autonomous Teslas are proven far and away safer than human piloted cars, more counties can adopt the same laws and Tesla can offer what they call “a cleared-out cockpit.”
When future business success books are written including ones on Tesla, it will be seen that one secret of Tesla success was to always seek to avoid the Detroit way, such as out-sourcing parts from far off lands. The Big Three has had to cut down available output because of no chips. Tesla was more careful but in the future wants almost everything made on site or at least in the same country. They will be able to make the Model 2 successfully in China by having 100% of the parts made there. This is called “localization.” Something Detroit gave up on long ago, and that poor decision to outsource is hurting them now.
If Tesla can stick to that $25,000 price and make the car in high volumes, simultaneously in five factories worldwide, then all the other automakers who want to make EVs don’t stand a chance as Tesla’s German factory alone can produce more than all 14 of BMW’s plants put together.
Plus Tesla already innovated by selling cars online and having few showrooms. They may innovate new ways of financing, so that they can throw out the old ways used by legacy automakers. One idea for instance, is for Tesla owners to rent out their cars to online driving services while they are not using the car. Let’s say you work in an office, while your car sits in the parking lot for 8 hours. But if it could be rented out several times during the day, you might make enough in one day to pay a month’s car payment similar to Airbnb vacation rentals. I wouldn’t rent my personal car out (though I did rent out my Ferrari to a movie star for a commercial once) but I’m Old Skool. Maybe modern day owners think of their car as more of an appliance. Why not let someone else use your refrigerator or toaster while you’re at work?
And so it is. The World Awaits your move, Elon. I think on this entry level car, you need more distinctive styling, but far above that in buyer’s priorities is range and price. Those be the Be All End All factors that will determine whether Teslas make it in the middle class.
Let us know what you think in the Comments.
THE AUTHOR: Wallace Wyss is the author of 18 auto history books and a regular commentator on Autotalk broadcast weekly by KUCR-FM Riverside, California.
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