First, Tesla canceled the Model 2-now it's working on a new small EV
Ars Technica • • business
Key Points:
- Tesla is reportedly developing a new smaller and cheaper electric vehicle (EV) with an all-new design, significantly shorter than the Model 3 and Model Y, based on information from four anonymous Tesla suppliers cited by Reuters.
- The new EV is expected to be built in China initially, which could subject it to a 100% tariff if imported to the US, though production expansion to Tesla's US and German factories might be possible later.
- Tesla has not officially approved production of this new model, and CEO Elon Musk's recent focus on robotics and AI, rather than traditional car manufacturing, raises questions about the project's priority.
- The company faces financial challenges, with Bloomberg forecasting a sharp decline in Tesla's free cash flow from $6.2 billion at the end of 2025 to -$5.8 billion, indicating potential cash flow issues.
- Tesla's history of lengthy and problematic development cycles for previous models like the Model X, Model 3, Model Y, and Cybertruck suggests that this new EV's development could also be slow and complicated.
