TESLA'S POTENTIAL ENTRANT: A SUBCOMPACT ELECTRIC VEHICLE FOR UNDER $26,000

In recent years, Tesla has left an indelible mark on the automotive industry, particularly with its premium electric vehicles such as the CyberTruck and the Model 3. However, the company's plans to introduce a subcompact electric vehicle capable of transporting two people for an MSRP of less than $26,000 (2020 dollars) has sparked significant interest and speculation among enthusiasts and industry watchers alike.

INTRODUCTION: FROM CYBERQUAD TO CYBERTRUCK

The new CyberQuad, a four-wheeled all-terrain vehicle option for the CyberTruck, presents a compelling proposition. As soon as this option hits the market, Tesla will have the lowest priced full-electric vehicle for two people. Despite its off-road capabilities, the CyberQuad will remain street legal, much like most quads.

While Tesla awaits the launch of the CyberQuad, it is worth noting that an enclosed, street-legal car at that price point may not be on their immediate roadmap. The automotive industry has not yet seen an affordable enclosed street-legal car that compares to Tesla’s premium offerings.

CHALLENGES AHEAD: THE PUBLISH DREAM CAR

Tesla's strategy revolves around premium branding and high MSRP. However, the market requires a vehicle that can compete with affordable models like the Honda Fit and Toyota Yaris. If Tesla were to launch a subcompact at a price point of $16,000, it would appeal to a market segment willing to trade premium features for cost savings.

Several factors need to be considered:

The vehicle would need to be accepted as a viable alternative to a second car or a vehicle for young, single individuals without families. It should have a competitive Return on Cost (TOC) that could range from $0.20 to $0.25 per mile, making it an attractive option for potential buyers. The car would need to offer reliable autonomous capabilities, which Tesla is known for, to create a seamless user experience.

THE FUTURE OF AUTONOMOUS MOTIVE: A TESLA AUTOCYCLE

Some speculate that Tesla may venture into the three-wheeler segment by producing an enclosed, electric autocycle. While this idea has been floated, no official announcements have been made. Such a vehicle would closely mirror the design and efficiency of the CyberTruck, emphasizing a combination of performance and affordability.

A potential Tesla autocycle could be around 1,700 pounds, designed to compete with vehicles like the 1,300-pound Elio Motors prototype, which offers impressive fuel efficiency at 84 miles per gallon (MPG). The Model 3, in comparison, has a lighter weight at 4,200 pounds and an efficiency of 140 city/124 highway MPG.

A Tesla autocycle might achieve around 405 city/359 highway MPG, making it a highly efficient and cost-effective solution for short trips. Such a vehicle would not only compete but also complement Tesla’s existing lineup, making it an ideal addition to the company’s self-driving service, particularly for single-passenger trips.

THE ASPIRATIONAL STARTER CAR

The strategic advantage of such a vehicle would be its affordability, allowing teenagers and young adults to aspire to a used Tesla as a first vehicle. This would immerse early buyers in the Tesla ecosystem, starting them on the path to premium Tesla products from a young age. An estimated timeline for such a vehicle suggests that it could be available around 2027.

CONCLUSION: FUTURE OF SUBCOMPACT ELECTRIC VEHICLES

While Tesla's subcompact electric vehicle remains a distant dream, it continues to be a high-priority initiative for the company. Over the next few years, we can expect Tesla to take significant risks to disrupt the traditional automotive landscape and consolidate its position as a leader in electric and autonomous vehicles.

As Tesla continues to innovate and refine its electric vehicle lineup, the introduction of a subcompact electric vehicle under $26,000 could be the missing piece in their strategic expansion, making Tesla an accessible and appealing choice for a broader audience.