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Tesla’s sub-$30,000 Model Q and 2025 product plans: The key

  • Travis Axelrod, Tesla’s head of investor relations, attended Deutsche Bank’s Autonomous Driving Day event in New York.
  • The bank’s report highlights the launch of a new affordable electric car in early 2025, tentatively named “Model Q.”
  • The report also mentions an extended three-row Model Y variant for the Chinese market.

Yesterday, reports emerged from China that Tesla, and specifically its head of investor relations, Travis Axelrod, had confirmed plans to launch a new low-cost electric vehicle next year at a Deutsche Bank conference in New York. Electric cars, followed by speculation in the electric car community. on Monday.

As expected, the rumors began to fade away. To separate fact from fiction, we obtained a copy of Deutsche Bank’s report summarizing the meeting. While the report sheds some light on Tesla’s ambitions, it doesn’t provide specific details, leaving a lot of room for speculation about future developments.

Cars of the Future: Everything we know about the 2026 Tesla Model Y ‘Juniper’

According to Deutsche Bank, Axelrod attended the bank’s Autonomous Driving Day event in New York, where discussions centered on Tesla’s Full Self-Driving (FSD) technology, robotaxi development and Optimus humanoid robots. Amid this high-tech mix, Tesla’s 2025 product plans have surfaced, but the details are far from comprehensive.

product roadmap

Deutsche Bank’s report provides a comprehensive overview of the meeting but does not directly quote Axelrod. However, the context strongly suggests that new low-cost models are a key topic of discussion. If true, this marks a major shift in Tesla’s product strategy for the next few years.

The report outlines Tesla’s strategy for launching several new vehicles in 2025:

New models and sales growth in 2025
  • A new entry-level electric car called “Model Q” will be launched in the first half of 2025. According to reports, the price will be less than $30,000 with subsidies ($37,499 without subsidies).
  • In the second half of 2025, Tesla is expected to release more models, aiming to expand its total addressable market (TAM). One of them is believed to be a three-row, long-wheelbase Model Y variant that may be exclusive to China.
  • Tesla plans to produce all new models on existing production lines, emphasizing efficient use of production capacity to achieve its goal of sales growth of 20-30% in 2025.
  • While management remains confident in expanding the Chinese supply chain, the high end of Tesla’s sales targets will require flawless execution, especially in North America.
  • The company’s plans for its Mexican factory remain dependent on geopolitical developments and the new Trump administration’s tariff policies.

Economical (and drivable) Tesla

Illustration by Jean Francois Hubert/SB-Medien for Carscoops

 Tesla's sub-$30K Model Q and 2025 product plans: Key insights from Deutsche Bank report

Now, let’s dissect the key points about the model presentation. Arguably the most noteworthy aspect here is the launch of a more affordable model, which Deutsche Bank has tentatively named the “Model Q” instead of Axelrod himself. Notably, the report makes no mention of specs or the “Redwood” codename rumors circulating online.

Elon Musk has been skeptical of low-cost models in the past, not out of distaste but because of the significant challenges in achieving profitability, maintaining quality and overcoming high development and production costs.

Back in October, during an investor call, he said: “There’s no point in having a regular (aka drivable) $25,000 model. That’s just silly.” That said, the Model The Q is expected to sell for $30,000, which does not contradict Musk’s remarks. If anything, Tesla is doing this by offering lower prices without completely hurting its profitability.

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Currently, Tesla’s cheapest car in North America is the RWD, single-motor Model 3, which sells for $34,990 with a $7,500 federal tax credit ($42,490 without the federal tax credit). That makes launching a sub-$30,000 Tesla a big move—assuming it’s more than just a smaller, stripped-down version of the Model 3.

What form can Model Q take?

 Tesla's sub-$30K Model Q and 2025 product plans: Key insights from Deutsche Bank report

If the Model Q materializes, it raises the question: Will it be an entirely new compact product, or a derivative of an existing model like the Model 3 or Y? Perhaps it could form a smaller hatchback with crossover-like proportions, as shown in our renders. A more far-fetched but also interesting possibility could involve a drivable version of the Cybercab. But I digress. It’s anyone’s guess at the moment, but reports point to a reveal in the first half of 2025, which means we won’t have to wait too long to get answers.

Chinese version of Model Y extended version

 Tesla's sub-$30K Model Q and 2025 product plans: Key insights from Deutsche Bank report
Our speculative rendering of the 2026 Tesla Model Y “Juniper” (Thanos Pappas for Carscoops)

Deutsche Bank’s report also confirms recent rumors coming out of China about an extended three-row version of the Model Y. This extended wheelbase version is designed for Chinese buyers and is expected to be based on the updated Model Y code-named “Juniper”. It will debut next year. This increase is logical in a market where larger/longer family vehicles are attractive, allowing Tesla to better compete with local rivals.

What else is coming?

As for the “other new models” mentioned in the report, details remain vague. However, Tesla’s focus on expanding its total addressable market (TAM) suggests the company is aiming to capture new customer segments – whether through pricing strategies, diverse body styles or regional exclusivity.

More: Musk predicts Tesla sales will surge 30% in 2025, boosting stock price significantly

Other points in the report underscore Tesla’s confidence in expanding its supply chain, especially in China, while also highlighting the challenges of perfect execution in North America. As for the much-watched Tesla Mexico factory, its future depends on geopolitical factors and the tariff policy of the new Trump administration, which is at least an unpredictable variable.

A critical year ahead

While the Deutsche Bank document gives an interesting look at Tesla’s roadmap, it doesn’t provide specific details. What we do know is that 2025 will be a crucial year for the electric car maker, with economy and versatility taking center stage.

Hanging over all of this, however, is the possibility of a dramatic shift in U.S. electric vehicle policy. If the incoming Trump administration eliminates the $7,500 federal tax credit — arguably a major driver of electric vehicle sales — Tesla and the broader industry could face serious headwinds. Germany is a cautionary tale; Tesla’s sales there plunged more than 43% this year after subsidies were lifted in December 2023.

Clearly, the stakes couldn’t be higher. However, as with Tesla, the answer remains as unpredictable as the company itself.

Puts and Options on 2025 Profits
  • Tesla explained that 2025 will be a product launch year, and whenever that happens, profitability will be disrupted because it is in the early stages of product builds and fixed costs are less efficiently absorbed.
  • But that could be offset by lower cost of goods sold with more affordable products.
  • Margins in 2025 will also depend on the decline in ASP (average selling price) based on the demand curve.
  • The main goal is to focus on growing sales and making incremental gross profits (rather than targeting a certain gross margin) to at least achieve overall FCF (free cash flow) breakeven. The auto industry is essentially funding more ambitious future projects.

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