New Tesla Model 2 Is REAL — $25,000 SUV With AI4 Chip Musk Swore Was Impossible

Tesla just quietly restarted work on the affordable electric car everyone assumed was dead, and the details coming out of four independent Reuters sources point to a $25,000 compact SUV that could finally change who actually buys a Tesla. After three straight years of declining deliveries and only 358,000 cars moved in Q1 2026, the pressure from the Chevy Bolt, Nissan, and BYD has forced Elon Musk to reverse the exact decision he made back in 2024, when he cancelled the cheap Tesla and called it pointless. Now the story is different, with a 4.28-meter body that fits a standard American garage, a single-motor rear-wheel-drive layout borrowed from the Edmunds top-rated 2026 Tesla Model 3 Standard, and a weight roughly 500 kilograms lighter than the Model Y, which translates into slower tire wear, lower energy consumption, and a genuinely different cost per mile for anyone comparing the new Tesla Model 2 against the rest of the affordable EV market in 2026. The piece that makes a $25,000 price structurally possible is the battery, because Tesla's confirmed $4.3 billion LFP deal with LG Energy Solution brings lithium iron phosphate cell production to Lansing, Michigan by 2027, cutting cell costs to roughly $98 per kilowatt-hour while letting owners charge to 100% every night without the degradation anxiety of nickel-based packs. On top of that, the hardware question that burned three million Hardware 3 owners appears to finally be resolved, since Musk confirmed the current AI4 chip is already enough for unsupervised full self-driving while the new AI5 tape-out is reserved for Optimus and supercomputer clusters, meaning this cheap Tesla SUV could ship future-proof from day one. Add in a dual-mode design built for both human driving and full autonomy through over-the-air updates, and the new Tesla Model 2, Tesla's affordable EV, Tesla battery technology, Tesla FSD, and Elon Musk's $25,000 car suddenly look less like another broken promise and more like a real vehicle taking shape for 2027. ___________ Here on the EV Briefing channel, you’ll get the latest updates on Elon Musk, Tesla, new Tesla Model 2, Model 2, Tesla Model Y, Model Y 2025, Tesla Model S, Model S, Model X, and Model 3. Our focus is to bring you everything about each Tesla EV, whether it’s an affordable Tesla, a potential Tesla cheap car, or a new Tesla car on the horizon. We cover daily Tesla news, EV news, Tesla update, and tech advancements coming straight from the Gigafactory. If you're into electric car, future EV, Tesla 2025, improvements in Tesla battery, increased Tesla range, and everything involving Tesla innovation, you're in the right place. We also track every Tesla reveal, Tesla launch, and of course, all major Elon Musk news and developments shaping the world of electric vehicles. _____________ #tesla #elonmusk #teslamodel2 #teslamodely #modely #gigafactory #electricvehicles