Official: Tesla small car release date announced

Sub-$30K Tesla Compact Crossover Reportedly Arriving in 2025

The first of Tesla’s new more affordable small cars is less than two years from US showrooms, the company has announced.

Speculative illustration created independently by Avarvarii.

The long-awaited small-car range from US electric-car giant Tesla is due in the second half of 2025 – pending any delays – CEO Elon Musk has revealed.

The announcement of the planned launch date comes hours after news agency Reuters exclusively reported the first of two “next-generation” small cars Tesla is developing will be a compact SUV.

Few details have been published on the new entry-level Teslas to date, however the pair of vehicles – which will be the company’s smallest and most affordable cars yet – are estimated to cost less than $US25,000 ($AU38,000).

“I’m often optimistic regarding time … but our current schedule says we will start production towards the end of 2025, sometime in the second half. That’s just what our current schedule says,” Tesla CEO Elon Musk told media and investors this morning.

It is the first time in years Tesla has commented publicly on arrival timing for the new small-car range, which to date it has only referred to as its “next-generation platform”.

The first of the cars will be built near Tesla’s headquarters in Austin, Texas – so company engineers can supervise the production line – before expanding to a new factory in Mexico, and a third location at a later date.

An Australian launch may be years away given the Austin factory has not been configured to produce right-hand-drive vehicles – as exclusively reported by Drive.

As previously reported by Drive, Tesla’s “next-generation” vehicle range will spawn two models, which will be smaller and more affordable than today’s Model 3 sedan and Model Y SUV.

Elon Musk has previously estimated the company could sell “in excess of five million” examples of both vehicles annually once production has ramped up. Last year Tesla built 1.8 million Model 3s and Model Ys combined.

The US car maker has confirmed the new models are planned to cost half as much to build as a Model 3, thanks to innovative new production process, and the vehicles’ smaller battery packs.

Rather than assembling the body of a vehicle first – and fitting the interior and battery further down the production line – Tesla says sections of the vehicle (front, rear, sides and interior) will be put together as complete assemblies first, before bringing them together at the end of the line to finish the car.

“There’s a lot of new technology – there’s revolutionary manufacturing technology here,” Musk told investors and media today.

“The reason I want to put this revolutionary manufacturing line at Giga Texas is because I want our engineers living on the line. This [new production method] is not an off-the-shelf, ‘just works’ type of thing.

“It’s a lot easier for Tesla engineering in Austin versus elsewhere. We are currently expecting to start production in the second half of next year.”

Musk would not comment on how quickly assembly would ramp up – or give production targets for the first year.

Speculative illustration created independently by Avarvarii.

“That will be a challenging production ramp … but I am confident that once it is going, it will be head and shoulders above any other manufacturing technology that exists anywhere else in the world. It’s next level.

“It’s hard to say what the unit volume will be next year, we’re not going to make any predictions on that front, but it does seem quite likely that we’ll start production next year.”

According to Reuters, the first of the small cars will be a “compact crossover” – a term used in the US to describe a car-like SUV – and is planned to begin production in June 2025, according to its sources, before ramping up in 2026.

Tesla Model Y.

One or more additional models are due to follow the “crossover”. It is a reverse of Tesla’s previous model roll-out, which has seen the sedan arrive ahead of the SUV.

Tesla has sent “requests for quotes” to suppliers, according to Reuters, and has reportedly forecast “weekly production volume of 10,000 vehicles”.

Engineers from the US car giant have reportedly torn down a Honda Civic to “study how to make cheaper cars.”