Tesla will reportedly build its long-awaited €25,000 electric car at its European factory in Berlin.
According to Automotive News Europe (via Reuters), citing an unnamed source, Tesla CEO Elon Musk confirmed the move during a visit to the German plant last week, but stopped short of confirming when the affordable new model will arrive.
Musk was in Germany following a high-profile visit to the UK, where he sat down with prime minister Rishi Sunak for a live-streamed conversation about the future of artificial intelligence, making headlines for suggesting the technology would one day "eliminate jobs".
His Berlin trip focused more specifically on the future of Tesla, and in addition to thanking staff at the plant for their efforts in scaling up Model Y production, he allegedly confirmed to them that the smaller new EV – known unofficially as the 'Model 2' – would be the second Tesla model to be built in Europe.
Tipped to hit the market at €25,000 (£21,670), the new Tesla is primed to serve as a direct rival to the likes of both Chinese-made value EVs like the MG 4 EV and BYD Dolphin, as well as upcoming entry models from European marques including the Renault 5 and Volkswagen ID 2.
This is the second indication so far this year that plans are progressing to bring an entry-level Tesla model to market. Earlier this year, Musk told shareholders the firm was developing "two new products", one of which is thought to have been the refreshed Model 3 saloon, now on sale, and the other the smaller, all-new car (previewed below).
Tesla has previously stated an ambition to scale up production to one million cars per year at the Berlin site, up from an estimated 250,000 earlier this year.
The updated Model 3 and the new model “will probably make in excess of five million units a year” of combined production volume, said Musk.
Tesla’s ‘unboxed' production process
At the firm's Investor Day earlier this year, Tesla bosses detailed how new production processes and technical innovations will help it to massively boost the efficiency of both its factories and its vehicles.