Austin, TX – Tesla, the electric vehicle pioneer, is set to introduce its most affordable electric vehicle yet in the first half of 2025. Tentatively named the Model Q, the new compact hatchback is expected to start at a highly competitive price point.

According to a recent investor relations presentation with Deutsche Bank and reports from outlets like InsideEVs, the Model Q will be positioned as a direct competitor to popular budget-friendly EVs like the BYD Dolphin and Volkswagen ID.3. Tesla's decision to adopt a smaller hatchback form factor for this new model is seen as a strategic move to target the European market, where BYD has been gaining significant traction.

Priced at approximately $37,499 before tax incentives, the Model Q will undercut the current starting price of the Tesla Model 3 by over $6,000. With the full $7,500 US federal tax credit, the Model Q could be purchased for as little as $29,999. This aggressive pricing strategy is aimed at expanding Tesla's market reach and appealing to a wider range of consumers.

Tesla has confirmed that the Model Q will be equipped with a lithium iron phosphate (LFP) battery, known for its lower cost and longer lifespan. Despite its smaller size, the vehicle is expected to offer a driving range of around 310 miles on a single charge.

The upcoming launch of the Model Q marks a significant milestone for Tesla as it continues to drive down the cost of electric vehicles. With increasing competition from both established automakers and new entrants, Tesla is keen to maintain its market leadership and accelerate the global transition to sustainable transportation.