New Tesla Model 2 = Game OVER for Gas

New Tesla Model 2 = Game OVER for Gas

Thanks to Private Internet Access for sponsoring today's video. If you’ve been waiting for a chance to buy 
a brand new Tesla for less than $20,000   then that time could be coming soon. Today 
I’m going to put on my optimistic hat   and explain all the different 
dominoes that are in effect right now   that could potentially lead to a new Tesla 
model that cost just $19,000 here in the US. To understand the reasoning behind all 
this let’s be reminded that Tesla’s mission   is to accelerate the transition to sustainable 

Providing a low-cost electric vehicle   is literally at the heart of their mission. In 
Elon Musk’s master plan for Tesla it includes a   list of the company’s main goals, which in part 
one was to create a low volume, expensive car,   then use that money to create a 
medium volume car at a lower price,   then use that money to create a more affordable, 
high volume car. They accomplished all of that.   And if you look at the very end of Elon’s master 
plan part two you can see it says one of the major   gals is to “Expand the electric vehicle product 
line to address all major segments.” This means   Tesla wants to (and in some cases already is) 
creating all kinds of different vehicles including   electric semis, pickup trucks, crossovers, vans, 
and hatchbacks. Hatchback is the key word there. Let’s revisit the very end of Battery Day 
when Tesla briefly mentioned their plans   for a future $25,000 Tesla passenger vehicle. 
Elon said they were confident they could design   and manufacture a compelling $25,000 electric 
vehicle as he stood in front of an uncovered   mystery car on the presentation slideshow.

then went on to say their goal has always been   to make a truly affordable electric vehicle and 
said they could probably make a fully autonomous   $25,000 Tesla about 3 years from now which at 
the time would be referring to September 2023. However, this mystery $25,000 Tesla 
(commonly referred to by many as the   Model 2 though there is no official 
name yet) is no surprise by any means.   Over a year ago in early 2020 there were 
reports of Tesla creating a car in China   for worldwide sale. This was confirmed just 
last month when there was an official government   report from the Tesla Shanghai Gigafactory that 
showed Tesla is indeed planning to add a new   cheaper model that will be designed and produced 
at the Shanghai facility as soon as 2022. The are a few things to keep in mind 
regarding Tesla’s Gigafactory in Shanghai.   First, China is the world's biggest market for 
electric vehicles so it has strong government   support for pretty much all EV companies. Another 
point to note is that Tesla’s Shanghai Gigfactory   is extremely fast and efficient. The first Chinese 
Tesla was built and delivered to a customer   in record time, just 10 months after 
construction of the facility began.   It also has a very high production efficiency 
with a low supply chain and labor cost.   With an annual capacity of 500,000 units, the plan 
for Giga-Shanghai is to produce the Model 3, the   Model Y, and now this new upcoming Model 2 compact 

So given the speed and efficiency of   Giga-Shanghai and the fact that Tesla delivered 
Model Y ahead of schedule last year, I don’t   think it’s unreasonable to assume the new Tesla 
Model 2 could come a lot sooner than expected. Speaking of speed let me tell you about today’s 
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you’ll also get 3 extra months for free. Jumping into the potential timeline of the new 
Tesla Model 2, last week Tesla China’s president,   Tom Zhu, confirmed in an interview with a Chinese 
media outlet that the upcoming $25,000 Tesla car   will be designed with China in 
mind but sold globally. He said   construction is already underway on a 
local research and development center   and the site will cover everything for this 
new Tesla model including vehicle design,   engineering, development and testing. Though there 
was no firm commitment, he said he thinks it could   be done within a year. But that appears to be 
more of an estimate than a confirmed timeline.   And finally just a few days ago, a rumored 
timeline showed up from Chinese Media IT   Home’s website that indicated the new 
Tesla model was approved in September,   product certification is coming next month, and 
first deliveries are planned for next year.

This   rumor was accompanied by a disclosure saying 
Tesla China neither confirmed nor denied it. So obviously there is no confirmed 
timeline, but based on what we’ve heard from   the official Tesla China division we do know 
they are for sure developing a new compact   hatchback model that will cost around $25,000 US 
and will most likely be slightly smaller than the   Model 3. We know from the slideshow at Battery Day 
that it will use lithium iron phosphate batteries   which are the cheapest and least energy-dense of 
the three battery groups.

high volume car

This supports the idea   of the car’s more affordable price tag. And 
it should have around 200-250 miles of range.   We also know that Tesla Shanghai’s battery 
manufacturer, CATL, recently invested $6   billion to expand lithium-ion battery capacity. 
The Model 3s in China are already using that sane   battery chemistry so this supports the timeline 
rumor of producing and delivering the car by next   year. We also know that the new model will be 
offered in China first before coming to the US.

So if and when the new Tesla Model does make it 
to the US it can possibly have an even cheaper   price tag of around $19,000 for some customers 
if the new EV tax credit bill gets passed.   Recently the Democrats proposed a reform to the 
federal EV tax incentive program called the GREEN   act. If passed, it could provide Tesla with a 
tax credit incentive up to $7,000 for 400,000   additional vehicles sold in the US. There is 
already a current federal EV tax credit inventive   program in place that I myself along with 
thousands of others were able to take advantage   of when buying their first Tesla vehicle. 
However, Tesla surpassed the current threshold   of 200,000 vehicles so the tax credit went away 
for them in 2019. But this proposed reform does   have a decent chance of getting passed since the 
democrats hold the house, senate, and White House. Remember this tax credit only applies 
to electric vehicles sold in the US.   According to the Tesla delivered 
around 235,000 vehicles in the US in 2020. So if   we assume some year over year growth on Tesla’s US 
sales let’s be conservative and guesstimate that   if the Green Act does get approved then Tesla may 
very well have the $7,000 tax credit for an entire   calendar year to cover 400,000 vehicles sold in 
the US.

Here’s where our optimistic hat comes   into play: If the bill does get passed later this 
year and if the Tesla Model 2 timeline somehow   matches the rumor and is ahead of schedule, then 
it could be possible to buy the upcoming $25,000   Tesla Model 2 in the US and get a $7,000 tax 
credit to bring the cost down to $19,200 after   factoring in Tesla’s required documentation 
and delivery fee which is currently $1200. Obviously there are a lot of if’s in that scenario 
and nothing is guaranteed or confirmed at this   point, but many of the signs are pointing to 
this being a real possibility.

And if it does   happen that means you could get a new Tesla for 
under $20,000 and it would be a huge success and   giant smack down to gasoline vehicles, especially 
when it’s competing with other similar compact   hatchbacks like the Toyota Corolla hatchback which 
are around that same price range. And even if the   $7,000 tax credit doesn’t get passed or it’s 
gone but the time the Model 2 comes to the US,   the Model 2 will still fill a big gap in the 
compact hatchback market where the Toyota Yaris   and Honda Fit have been discontinued. It will 
seriously be a game over moment for a lot of gas   cars when customers can buy a new Tesla for the 
same amount of other affordable cars in the same   market category. Of course the base Tesla Model 2 
at the price of $25,000 will be just that: basic   and minimal.

You’ll of course need to pay more for 
the extras like full self driving or another paint   color, but at the end of the day the base Model 2 
is still a Tesla at its core and will still have   the unmatched drive train, battery efficiency, and 
the high safety standards that Tesla prioritizes   in all their vehicles. Plus it should be 
capable of full autonomy according to Elon. What do you think? Am I crazy to think 
this is possible? What do you think will   happen? Let me know in the comments below. 
If you enjoyed this video be sure to give it   a thumbs up and subscribe if you want to 
see more videos like this in the future.   My name is Andy. Thank you for watching, 
and I’ll talk to you in the next one..

As found on YouTube

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