Analysts caution that Tesla’s next growth stage, driven by the Model 2, is still several years in the future

Analysts Warn That Tesla‘s Next Growth Phase, Boosted By Model 2, Is Years Away

The Tesla Model Y is currently one of the best-selling car-shaped vehicles globally, but the brand itself faces challenges. Consumers are eager for affordable Electric vehicles, and Elon Musk has confirmed plans to meet that demand with a $25,000 EV, potentially called the Model 2. However, an analysis by Evercore suggests that substantial production volume of this car may not be achievable until at least 2027.

According to a report from Bloomberg, Evercore analysts, led by Chris McNally, predict that production of the Model 2 could start in late 2025. However, achieving Tesla’s target of 1 million units in 2026 seems unlikely. The process of ramping up production and setting up factories will take time, leading Evercore to estimate closer to 500,000 units in 2026, with the 1 million mark not being reached until 2027.

While McNally has been optimistic about Tesla in the past, recent downgrades from Wells Fargo suggest challenges ahead for the brand. With price cuts not driving sales growth as expected, some stagnation is attributed to the lack of new models beyond the Model 3 and Model Y. Introducing the Model 2, a more affordable option potentially without advanced driver assistance technology, could help spur growth for Tesla.

Details about the Model 2 remain scarce, but it is expected to be cost-effective and may depart from Tesla’s existing technology offerings. The timeline for production in 2025 indicates the need for swift progress from Tesla in unveiling this new model to maintain its competitive edge in the market.