Tesla planning a more affordable hatchback for Europe

Tesla’s ongoing quest to make more affordable cars will lead it into the compact hatchback segment, its chief executive hinted. It plans to make a European-flavored model aimed directly at the Volkswagen ID.3.

“We will not succeed in our mission if we don’t make cars affordable. The thing that bugs me the most about where we are right now is that our cars aren’t affordable enough. We need to fix that,” said company boss Elon Musk in a conference call. “It would be reasonable to assume that we would make a compact vehicle of some kind, and probably a higher-capacity vehicle of some kind,” he added, according to British magazine Autocar.

Tesla would presumably position the yet-unnamed compact model as its entry-level car, and it would need to price it in the vicinity of €35,000 to lure buyers away from the ID.3. In Germany, Volkswagen’s first purpose-designed electric car carries a base price of €35,754 (about $42,000 at the current conversion rate), while the Model 3 starts at €46,880 (approximately $55,300). Of course, affordable is an extremely relative term; keep in mind the eighth-generation Golf, which is about the same size as the ID.3, starts at €19,880 (roughly $23,500).

Unsurprisingly, Musk offered no concrete details about the compact model. We don’t know where it will be built, though Tesla recently cut down a forest to build a Gigafactory on the outskirts of Berlin. It might look like a shrunken Model 3, or stylists could take its design in a wilder direction. It’s too early to tell whether it will be sold in the United States, where rivals Honda and Volkswagen see no potential in the electric hatchback segment, and there’s no word yet on where it’s positioned in the firm’s queue of upcoming models.

Tesla has a lot on its plate. It successfully launched production of the Model Y earlier in 2020, and it’s now turning its attention to bringing the Cybertruck to the market. It also needs to finish developing the much-hyped Roadster it introduced in 2017, and it has to start delivering the Semi that hundreds of fleet operators are still waiting for. In other words, don’t expect Europeans to start zipping around in a Golf-sized Tesla in the coming months.

Looking ahead, Tesla might downsize into an even lower segment of the market. Earlier in 2020, shortly after it opened a research and development center in Shanghai, China, it published a sketch that looks like a pocket-sized city car in the vein of the Genesis Mint concept. “Tesla is waiting for you; Chinese-style Tesla will sweep the world,” the company wrote to accompany the sketch. Here again, we don’t know when it will reach the market, though Musk affirmed in 2018 that Tesla will release a compact car “in less than five years.”

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