Move over Model 3! Tesla focused on building a smaller, much cheaper electric car

Tesla CEO Elon Musk says the electric car brand’s current main focus is the development of a smaller, more affordable model able to be produced in much larger quantities - twice as much as the current Model 3 and Model Y, in fact.

This could cut down wait times for new Tesla models by a significant margin, with wait times for the Model 3 currently stretching out to up to seven months, while buyers will be waiting up to eight months for the Model Y.

The idea of a mass-market electric car from Tesla isn’t new, with Musk having flagged his desire for a US$25,000 (AUD$39,900) Tesla model during an event in 2020.

“This has always been the dream since the beginning of the company,” he said at the time. He gave a three-year timeline for the model to be in production as well as it being fully autonomous, putting the end of next year as a rough launch time.

However, during a recent Q and A, Mr Musk revealed the development team has moved on completely from the Semi truck and the tumultuous Cybertruck to work on the new platform.

The prolific tweeter (Mr Musk has tweeted more than 19,700 times) told media, shareholders, and stream viewers during a Q and A for the Q3 2022 update that the next Tesla product will be able to be built at a two-to-one ratio of the Model 3 and Y platform for the same cost.

“Well, we don't want to talk exact dates, but this is… the primary focus of our new vehicle development team, obviously,” Mr Musk said.

“But at this point, we've done the engineering for Cybertrucks and for Semi. So, it's obviously against what we're working on, which is the next-generation vehicle, which will be probably about the cost of 3 and Y platform. It will be smaller, to be clear.

“But it will, I think, certainly exceed the production of all our other vehicles combined. I mean, obviously, we're going to take everything we learned from S, X, 3, Y, Cybertruck and Semi into that platform. 

“But we - as you've said to us many times, we're on a 2-for-1 target. So we're trying to get to that 50% number again.

“It's like, we're going to take two. If that's exactly… how are we making two cars for the amount of effort that we currently take to make one Model 3.”

While the idea of Musk’s “compelling US$25,000 electric car” is enticing, the exchange to Australian Dollars and likely higher cost of the car being sold locally means the likelihood of a sub-AUD$40,000 electric car from the US brand is low, at least in the near future.

Currently, the cheapest Tesla model is the entry-grade Model 3 at about $60,000 before on-road costs, while Australia’s cheapest electric car overall is the Chinese MG ZS EV at $44,990 drive-away. Close behind is the BYD Atto 3, which starts from $44,381 but isn’t drive-away, requiring on-road costs to be paid.