Tesla’s announcement during its Q1 2025 earnings call has sent shockwaves through the automotive industry, revealing plans for mass production of the long-anticipated Model 2, a groundbreaking electric vehicle projected to retail around $12,000. CFO Vibhav Tanaga emphasized Tesla’s commitment to making electric vehicles accessible to a broader demographic, aiming to cater to middle-class families and budget-conscious consumers. With production expected to kick off as early as June 2025, the Model 2 could reshape the U.S. auto market, drastically reducing the barriers to EV ownership.

Three Gigafactories—Giga Texas, Giga Mexico, and Giga Berlin—are poised to play pivotal roles in the production strategy. Giga Texas, leveraging advanced manufacturing techniques, aims to produce up to 500,000 units annually, while Giga Mexico is projected to reach a staggering one million units per year. These facilities will utilize revolutionary manufacturing methods, including the unboxed process and Giga Casting 2.0, to streamline production and cut costs.

This ambitious plan hinges on innovative battery technology, shifting from traditional lithium-ion to sodium-sulfur batteries. This change could reduce battery costs significantly, enabling Tesla to maintain profitability while delivering an affordable product. The Model 2 is not just a vehicle; it symbolizes Tesla’s vision for a future where electric mobility is within reach for all, potentially marking a historic turning point in the automotive landscape.