In a shocking revelation that could reshape the electric vehicle landscape, Tesla has officially commenced production of its highly anticipated Model 2 at its Fremont factory, with a jaw-dropping price tag of just $15,990. This bold move by Elon Musk marks a significant shift in Tesla’s strategy, aiming to capture a market increasingly dominated by competitors like BYD. The Model 2, a compact crossover that closely resembles a scaled-down Model Y, is set to be unveiled at the Tesla shareholder event in November, generating immense buzz and speculation.

With production starting in June, Tesla has managed to slash costs by reusing the Model Y’s production line, enabling this price point that initially seemed unattainable. The Model 2 will feature a simplified design, including fabric seats and a manual lift gate, cutting production costs without sacrificing core Tesla features like autopilot capabilities and over-the-air updates. While it retains the sleek crossover form, the vehicle will be equipped with a smaller 53 kWh battery, offering an estimated range of about 200 miles—impressive for a vehicle at this price.

However, the stakes are high. Analysts warn that the Model 2’s price could cannibalize Model Y sales, as consumers may question why they should invest over $50,000 for a vehicle that closely resembles a more affordable option. As Tesla grapples with the loss of the $7,500 federal EV tax credit, the urgency for this budget-friendly model has intensified. Musk’s gamble could either revitalize Tesla’s market share or lead to a dramatic decline in the perceived value of its higher-end models.

As anticipation builds for the Model 2’s reveal, the automotive world watches closely. Will this affordable electric vehicle be the game-changer Tesla needs to stay competitive? The countdown to November begins, and with it, the potential for a seismic shift in the EV market.