Tesla expected to announce new entry-level Model 2 electric car soon

As Tesla plans to host its first Investor Day on March 1, it is expected that CEO Elon Musk will unveil a little master plan - a new entry-level Model 2 electric car, CarScoops reported. It is no secret that Musk has over the years wanted to build a great $25,000 electric vehicle, which has always been the company's dream from the beginning.

Now, a New Street Research Managing Partner and Tesla Bull, Pierre Ferragu is predicting that Musk will unveil this car on Investor day. That's not all. Ferragu has made some very specific predictions about the make of this vehicle. He believes that the new model will be 15% shorter, 30% lighter, and feature a battery that is 25% smaller compared to the Model 3.

Along with these changes, there will be changes in the design, architecture, and manufacturing of the electric model, which will result in it being some 37% less expensive to build.

If all of this ends up being true, it would mean a gross margin of over 20% on the Tesla Model 2. Ferragu also compared this margin with what Toyota makes on every Corolla, which is less than 10%. All in all, he says that it could mean 12m units in sales by 2030 with revenue of $400 billion.

Another analyst from Guidehouse Insights predicted that though Musk will announce the Model 2, it will only be for China. He added that a smaller car with a smaller battery and less range would work well in the Chinese market. It will help Tesla ramp up its sales in China as well as provide a way for Tesla to slowly ramp up interest in a similar model for the US market.