New entry-level Tesla compact EV: baby EV could cost less than £22,000

November 20, 2023 by

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Tesla is working on a new entry-level electric car, and it could be priced from £18,000. Details of the technology which will underpin this car were teased during an Investor Day earlier this year, and the design has been teased during a shareholder meeting. 

  • New Tesla compact EV getting closer to reality
  • Uses new lighter batteries
  • Could have over 180 miles of range
  • New motor is cheaper to make
  • Clever manufacturing process also keeps cost down
  • Could cost from £22,000

With the new Tesla Cybertruck nearing completion, people’s attention is starting to turn towards the mysterious new affordable hatchback from the brand. This new entry-level model has been teased a few times, and it could be revealed in 2024.

It doesn’t even have a name yet, but it won’t be called the Model 2. Elon Musk has said that it’ll cost around 50% less to build than the Model 3 and Model Y thanks to some clever new manufacturing techniques.

New Tesla compact EV design

While there are no official images of the new Tesla hatchback, the car has been teased a few times to give you a rough idea of what the car will look like.

This very basic silhouette shows that the new entry-level car will have a similar profile to the Tesla Model Y, albeit a bit shorter, of course. Tesla also slipped a teaser into a video on X (formerly known as Twitter) earlier this year.

These are of course just preliminary drawings, but you can just about make out the short-squat stance of this new car. It has something of the Genesis GV60 about it thanks to the triangular headlights and sloping roofline, and you can bet that it’ll have elements of the new Tesla Model 3 around the front.

New Tesla compact EV batteries and range

When this new Tesla compact EV does arrive, it’ll use a new type of battery which is more powerful, safer and cheaper than the Model 3’s thanks to something called a tabless design.

This technology is essentially a new way of connecting the battery’s cells together, and it reduces the size of the battery by around 35%. They can also store and release more energy without overheating, giving them as much as 16% more range per kilowatt-hour than traditional batteries.

Tesla is also planning to make the battery a structural part of the car, helping make it lighter and stronger, 10% lighter to be precise. That’ll boost the range by a further 14%. Let’s assume for the sake of argument that the new Tesla hatchback has a battery half the size of the Model 3’s, this would equate to a range of around 180 miles.

See how the Tesla Model 3 gets on in a range test…

To put that into perspective, the £27,000 Fiat 500 Electric has a range of 118 miles, potentially 62 miles less than the entry-level Tesla. And that car could end up costing around £5,000 less.

New Tesla compact EV motors and performance

To help further reduce the cost of this new Tesla, it will use a new type of electric motor which uses no rare earth materials. This makes it cheaper to make and lighter. In fact, this new drive unit will cost just $1,000 (£820) to produce, and it can be built in a smaller factory to help save even more money.

Tesla’s new drive unit will be smaller and cheaper to make…

So what does this mean for performance? Well Tesla will probably only use one motor to keep the price down, but that doesn’t mean it’ll be slow. Rear-wheel drive versions of the Tesla Model 3 can do 0-60mph in 5.3 seconds, quick enough to beat the Honda Civic Type R by half a second, and it’s possible that this lighter car with its clever batteries could be even quicker.

How much will the new Tesla compact EV cost?

Elon Musk has already confirmed that the new Tesla hatchback could cost around $25,000, which is around £22,000. That would make it almost £5,000 cheaper than the MG 4, and a whopping £10,000 less than a BYD Dolphin.

Check out Mat’s in-depth review of the MG 4…

So how is this car going to cost so little? Well aside from the new motor and battery tech, Tesla is also working on some new, more efficient manufacturing techniques which will help keep the cost down.

The Tesla Model 3 and Monel Y make their way up the production line as a whole car, requiring bits to be assembled and disassembled multiple times along the way for things like painting and wiring.

This new car however will be built differently. Teams of people and robots will work on fully assembling separate parts of the car, before marrying them together at the end in one go. For example, the doors will be built, painted, wired and the door cards assembled off the car, before being bolted on at the end of the line. This means the car is only fully built once.

Musk claims that this will yield a 30% improvement in time, space and efficiency, as well as make this car around 50% cheaper to build than the Model 3 and Model Y.

The new Tesla Cybertruck replaces a lot of cables with wireless transmitters to save weight and make it easier to build…

In addition to this, a lot of work is being done to reduce the amount of wiring. All new Tesla models will use a 48V electrical system as opposed to a 12V setup, allowing for smaller and lighter wires to be used. A lot of wiring will also be removed completely, using wireless networks to control certain things instead.

When will the new Tesla compact EV go on sale?

Development work on the new Tesla hatchback has only just begun, so you’ll have to wait until at least 2024 before you’ll even see a concept version of this car.

The Tesla Cybertruck has taken over three years to go from concept car to road-ready vehicle, but this new hatchback shouldn’t take as long as that. A lot of the technology you’ll see on the hatchback has already been developed for the cybertruck, such as the new wiring system, so you might see this new car hit the road in 2025.

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