The cheapest Tesla you can buy right now will set you back $44,990 (£42,990) before any incentives or savings, That gets you the entry-level, RWD (rear-wheel drive) Model 3 with a range of around 272 miles EPA (305 miles WLTP for those in Europe).
And that's a problem.
It's not exactly an affordable electric car, and Tesla risks being left behind after trailblazing the EV market with its current market dominance certainly not secure.
Rival manufacturers are launching more affordable electric vehicles which are just as competitive on the road and it's going to make things increasingly difficult for Tesla to justify the premiums it's charging for its current range of EVs.
It needs a more affordable option, and quickly.
Here comes the competition
GM (General Motors) made some major announcements at CES 2022, including its new 2024 Silverado EV truck which isn't the threat to Tesla's affordable gap, but the Chevrolet Equinox EV, which was also confirmed, could well put the pressure on Elon Musk's firm.
The Equinox electric car will be available from fall 2023 (around September-November) and importantly Chevrolet says it "will start at an estimated MSRP of around $30,000 in the US."
It's a compact SUV, and with that price, could easily be stiff competition for both the Tesla Model 3 and Model Y (which is also a compact SUV).
Tesla is still pitching itself as a premium brand, but climb inside an Audi or Mercedes EV after stepping out of a Tesla and the step-up in quality is marked.
There's plenty more competition as well. Last year we saw two more fully electric, compact SUVs launch with the Hyundai Ioniq 5 and Kia EV6 both costing less than the cheapest Tesla (but more than the Equinox EV), while offering similar range.
I've driven both the Ioniq 5 and EV6 and found both provide substantial competition to the pricier Teslas.
Every major automaker is developing EVs though, and the list of cars offering similar specs and similar tech for less than Tesla continues to grow.
Tesla is still pitching itself as a premium brand, but climb inside an Audi or Mercedes EV after stepping out of a Tesla and the step-up in quality is marked.
Is a $25k Tesla the answer?
Tesla may have an ace in the hole, however. The affordable Tesla Model 2 has been rumored for some time, and while Elon Musk has ruled out 'Model 2' as the final name for the car, he has confirmed the company is working on a $25k EV.
Musk also said it would be ready for 2023, but we've witnessed significant delays to the Tesla Cybertruck which leaves me cautious about when Tesla may be able to deliver another entirely new vehicle.
If the timeline gets pushed back, there's a risk the affordable Tesla may arrive too late.
However, if Tesla can get the Model 2 (or whatever it will be called) to market in the next 12-18 months, it will be game changing - especially if it can transfer over the bevy of tech we love in its current range, while also delivering decent range. At that price, it may be hard to beat.
According to reports, Tesla already has manufacturing lined up in China for the Model 2, and a more recent Model 2 leak claims a prototype has already been completed and that trial production would begin at the end of 2021.
So while Tesla is facing ever increasing pressure, it may have the release valve just around the corner. It could certainly do with some positive news too, after it has recalled almost half a million cars over safety issues.
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