The Tesla Model 2 aims to make electric vehicle ownership more affordable. Tesla probably won't use the name "Model 2" because it implies a smaller version of the Model 3 when it will really be a more economic version. Tesla's target is a $25k car, but the Model 3 was also supposed to be $35k but ended up being more expensive. The Model 3 currently sits at just under $47k in the US.
When Tesla created the Model 3, they essentially built a scaled-down, more efficient version of the Model S by removing features that were more expensive or hard to manufacture. Many of the switches, vents, and features were either simplified or completely removed, including the instrument cluster.
This includes replacing physical controls with on screen controls, like the handle for the glove box, mirror adjustment buttons, windshield wiper controls and many others.
Other controls were simplified to reduce complexity and therefore cost. Some examples include the simplified vent system and steering wheel buttons. The interior and exterior door handles were also redesigned to reduce the amount of moving parts.
Back in 2016 when the Model 3 was unveiled it wasn’t entirely clear which features were cost-cutting measures and which were feature iterations and would become standard in all future Teslas.
When Tesla debuted the new Model S in 2021 it became clearer which features may have been cost-cutting measures. We saw a lot of Model 3 features carry over to the redesigned Model S, such as a horizontal center screen, one continuous vent with on screen controls, but not every feature made it over.
These were seen as the compromises Tesla made to create a vehicle that is cheaper to manufacture when compared to the Model S.
The Model 3 doesn't have an air suspension, cooled seats, a rear screen, or an instrument cluster. It also has a slightly smaller center screen. So what more can Tesla remove or simplify from a Model 3 to create a more affordable, scaled-down vehicle?
Tesla would likely keep all software-only features since they don’t add much to the cost of the vehicle. Some possibilities may include fewer speakers, removing heated seats in the rear, removal of wireless chargers, and removal of the glass roof. Removing any cameras or the FSD computer is unlikely since the FSD package is profitable for Tesla and there are also safety features that depend on that hardware.
It’s possible that Tesla's Model 2 has transformed into the supposed Robotaxi mentioned at the Giga Rodeo Event. Elon has previously talked about creating a car without steering wheels or pedals, which would be fitting for a fully autonomous vehicle.
At Battery Day, Tesla said that standard range vehicles and future models will use lithium iron phosphate batteries. LFP batteries are cheaper to produce and have some advantages and disadvantages when compared to nickel batteries. Tesla would likely use the 4680 LFP battery for the Model 2. This would make the vehicle smaller and lighter, but may also offer less range.
Tesla's 4680 battery
Tesla’s 4680 cell is named after its dimension, 46mm x 80mm. They are much cheaper to manufacture, producing 5x more energy, 16% more range, and 6x more power, making them far more economic than traditional batteries. Using 4680 batteries, the Model 2 is expected to have a travel range of 250 to 300 miles.
Tesla will use a structural 4680 cell pack in a single body cast to manufacture the Model 2 as efficiently as possible. This along with advanced robotics will help Tesla achieve economies of scale and mass-manufacture their most affordable car yet.
In May 2022, during the Financial Times 'Future of the Car' interview (video), Elon stated that there is some probability that Tesla would make a car smaller than the Model 3, leaving the possibility open for both, a smaller Model 3 and a Tesla Robotaxi.
Don't expect the “Model 2” anytime soon, Elon has talked about Tesla finishing the CyberTruck this year and starting production in 2023. Tesla also has the Roadster and Semi to produce, which are very likely to be ahead of the Model 2.
By that time, we may see drastic improvements in FSD that could warrant a fully autonomous Robotaxi. I wouldn't expect the Model 2 before 2024 at very best, but we could see prototypes before then.
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Following yesterday’s news that the Tesla Robotaxi network is ahead of schedule and set to launch on June 12th, overnight, Elon confirmed that the Robotaxi network is far ahead of expectations.
With Elon back and working full-time at Tesla, SpaceX, and xAI, we’ll likely receive a lot more updates on what these companies are working on. In this case, Elon confirmed that Tesla has been running autonomous Model Ys with no one in the driver’s seat on Austin’s public seats, with no incidents. According to yesterday’s report, there is still someone in the passenger seat just in case something comes up, but essentially “driverless.”
Elon also confirmed that Tesla’s ambitious plans to have a Model Y deliver itself directly from the factory to a customer, presumably in Austin, will also occur next month.
For the past several days, Tesla has been testing self-driving Model Y cars (no one in driver’s seat) on Austin public streets with no incidents.
A month ahead of schedule.
Next month, first self-delivery from factory to customer.
While this will likely be geographically limited to the areas around Giga Texas, and potentially, Tesla’s Fremont factory in the future, it is still a great step toward reducing the cost of vehicles.
Public Access by End of June
In a reply, Elon also confirmed that anyone would be able to test out the Robotaxi network by the end of June. While in typical Elon fashion, he didn’t answer the question of whether the network will be invite-only at first, we expect this will likely be the case and it won’t just be anyone who can open the Tesla app and summon a robotaxi.
At the Q1 2025 Earnings Call, Elon stated that the Robotaxi service would only be available to the public in late June or early July, giving Tesla enough time to test with internal audiences, as well as invited testers. This timeline seems to be fairly concrete, but if you’re planning a trip to Austin to check out Robotaxi, we suggest looking at early July, as timelines can still shift.
Tesla’s Optimus X account recently dropped another video, following up on its previous dance routines. Previously, Optimus demonstrated impressive footwork, along with a level of agility and balance that has improved immensely since Optimus was first unveiled.
In a new video posted to X, Optimus is seen doing actual work. While it’s still in the early days, Tesla shows off how the robot is learning to perform small tasks.
The real focus of the video isn’t on the tasks Optimus is performing but on how it’s learning to perform these tasks. Optimus is learning by watching humans perform the work through a first-person view.
The video demonstrates Optimus tackling daily tasks that require a good degree of dexterity and environmental awareness, including vacuuming, cooking, and even taking out the trash. While the previous demonstrations were more of a showcase of Optimus’ physical capabilities, this one is more about the learning process.
The key breakthrough, which was emphasized by members of Tesla’s Optimus AI team, is the robot’s new ability to learn complex, bi-manual tasks largely from watching videos of humans performing them. This results in a reduction in direct teleoperation, where real humans control Optimus remotely to generate training data.
Murtaza Dalal, a member of Tesla’s Optimus AI team, shared his excitement about the development - and noted that while teleoperation doesn’t scale, training by watching video does scale — extremely fast.
First-Person Perspective
The ability to learn from human video (while currently focused on a first-person perspective) means Optimus can bootstrap new tasks much faster than before and with less human interaction required. Milan Kovac, an Optimus Engineering team member, elaborated on this, stating:
“We recently had a significant breakthrough along that journey, and can now transfer a big chunk of the learning directly from human videos to the bots... Many new skills are emerging through this process, are called for via natural language (voice/text), and are run by a single neural network on the bot (multi-tasking).”
What’s Next for Optimus?
The road doesn’t stop here. The Optimus team is already looking to see where they can push the barriers of learning, and is looking at having Optimus learn directly from internet videos of humans doing tasks. This means learning from third-person views rather than the more optimized first-person views that it is currently learning from today.
Once Optimus can translate the third-person perspective to the first-person, much like humans do, then it opens up a whole new world of training data. Optimus will be able to learn simply by watching the world around him.
All this rapid advancement is critical for Tesla. Elon has doubled down on Optimus being Tesla’s key to unlocking the biggest market in the world, and it is key to pushing Tesla’s new vision of sustainable abundance.
This is just the first step in a long process - we’re still years away from Optimus making its way to customer homes, but the journey has to start somewhere. For now, it’ll be working hard in Tesla’s labs and factories, and we expect to hear more about Optimus later this year once the production line is up and running.
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