It is being reported that Tesla will build a new small car range at its Berlin plant.

Tesla chief Elon Musk told Berlin staff about the plan when he visited the plant last week, according to a Reuters report.

The Reuters report cited an anonymous staff member.

The long speculated lower-priced Tesla model, dubbed ‘Model 2’ and priced at around €25,000, is potentially a key part of the plan to get to much higher volume globally. Tesla has also cut its prices and sparked a price war as it seeks to step up volume ahead of a sales push by many automakers – including the Chinese – to gain BEV sales as the whole industry transitions to plug-ins and BEVs and away from cars powered solely by internal combustion engines.

However, some analysts have warned that relatively high BEV purchase prices currently are constraining demand just as the world’s economy hits headwinds and the rebound from supply shortages loses momentum.

Meanwhile, other OEMs are also planning lower-priced BEVs.

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A small electric VW (priced at €25,000 or below) dubbed ID.2 is due in 2025. It has already been previewed by the ID.2all concept

Stellantis brand Citroen is also planning a budget electric car (e-C3) for launch in 2025 which would have a small battery variant priced under €20k. It would follow a variant with a larger battery launched in Q2 2024 priced at around €23k.

GlobalData forecasts that Tesla will start making a small C-Segment hatchback car in 2024, with production slated for its plants in Germany, China and Mexico.