Why Tesla's Next Car Should Not Be a Smaller, $25K Vehicle

By Kevin Armstrong
A new vehicle type like a van may help Tesla more than an affordable car
A new vehicle type like a van may help Tesla more than an affordable car
TopElectric/YouTube

Tesla is known for its luxurious, high-end electric vehicles with cutting-edge technology and impressive performance. However, the company may be planning a significant pivot to produce a more affordable car that would cater to a broader audience. This move would undoubtedly shake up the automotive industry, but one renowned industry expert thinks a cheap vehicle, while doable, is not the right move for Tesla.

Sandy Munro recently shared his insights on the future of electric vehicles, specifically Tesla, with Tesla Owners Silicon Valley. Munro sees a path that Tesla could achieve this less expensive car. According to Munro, it would need to use lithium iron phosphate (LFP) batteries, which are cheaper and still good enough for most of the population. Tesla currently only uses LFP batteries in a portion of their models today.

Sandy Munro Discussing Tesla

The Risk with Small, Cheap Cars

Munro says no one makes much money on small cars, especially in North America. Furthermore, Tesla would have to be more frugal in its approach to creating a more affordable vehicle. This approach means the company would have to consider what features are not essential. For example, Munro suggests that cheaper drum brakes could be used instead of disc brakes and that Bose stereo system might not be necessary for a more affordable car.

Munro says Tesla could get down to $24,000 to $28,000. But he cautions, "coming out with the cheap car, what does it really do for you? Not much, because people are still willing to put their hand in their pocket and pull out 40 grand and say I want that one. That is the risk with small cars." He also says small cars make a few hundred dollars per unit sold, considerably less than Tesla's current margins.

However, Musk must see some advantages in offering a more affordable car; he told the B20 conference in November, "Musk responded to the question familiarly, "I can't speak too much to the future of Tesla product development, except to say that we do think that making a much more affordable vehicle would make a lot of sense and we should do something."

A No-Risk Proposition with High-Profit Potential

Nevertheless, there is a significant gap in the market that Tesla could not only fill but dominate, "if I were Elon Musk, I'd be looking at making a minivan or something like that. He can still make a shitload of money and not take any risk. That is a no-risk proposition, making a minivan." Musk has floated the idea of a "highly configurable vehicle" in the past, and Munro sees a gaping hole. "When Dodge and Chrysler walked away from the minivan, there was no minivan out there. There is one, Kia Carnival and these guys can't keep them in the showroom."

Munro thinks it is the marketing people who killed the minivan, "everybody in marketing says, 'oh, we don't want to produce a car like that because it emasculates men and it gives women the image of being a soccer mom.' Guess what? There are a lot of guys out there who like that car because it was the biggest selling thing they had, and on top of that, there are a lot of soccer moms! So why not try and take advantage of that?"

A Tesla minivan would have all the amenities expected from the brand, but it could also sell the safety factor. Teslas are repeatedly awarded for their rigorous design and commitment to safety. Given that minivans are synonymous with transporting young families, it would be a perfect match.

We will learn about Tesla's next-generation model on Investor Day on March 1.

Norway Approves Tesla’s FSD Testing on Public Roads; Potential for Europe-Wide Deployment

By Karan Singh
Not a Tesla App

According to filings found by Kees Roelandschap on X, Tesla has obtained a 2-year exemption from UNECE autonomy regulations to run FSD Supervised on public roads in Norway. This marks one of the first positive developments for regulations and autonomy in Europe — great news for European customers.

Previously, European transportation agencies stressed additional caution and requested more time to legislate, further delaying the widespread UNECE regulation changes for autonomous vehicles.

Norwegian FSD - Employees Only

Following the recent approval from the Norwegian Road Authority, Tesla will be permitted to use its Supervised vehicles on public roads in a testing capacity. This exemption does not yet apply to customers, so we will have to wait and see how testing progresses.

Tesla will specifically be allowed to run FSD V13 and its derivative builds (meaning AI4 vehicles only) with automated steering and speed controls on EU-registered and approved vehicles.

Tesla will also be required to have Tesla-trained drivers (employees) conduct the testing. There is no specific policy in place that enables the use of FSD for customers at this time. However, as testing is conducted and bureaucratic hurdles are overcome across various transportation departments, Tesla may be able to extend the offer to European customers. According to Tesla’s latest earnings call, the company still plans to release FSD in Europe by the end of the year.

Tesla has already begun testing in the Netherlands, showing off FSD’s capabilities in Amsterdam.

Article 39 Exemption

The UNECE can grant exemptions for innovative technologies that move faster than legislation under Article 39. However, Tesla requires the backing of a national ministry of transport to bring this to the UNECE’s attention. The next round of voting on critical issues is expected on May 12, 2025, which may not leave Tesla much time to present its findings to UNECE.

We don’t expect Tesla to receive authorization immediately. It may take several weeks or months of testing from the Netherlands or Norway teams before one of the two countries is willing to support Tesla’s exemption bid.

However, if Tesla achieves an Article 39 exemption, it could allow Tesla to roll out FSD to customers across Europe, provided there are no country-level exemptions.

Tesla Reintroduces FSD Transfers in North America

By Karan Singh
Not a Tesla App

Following customer requests, Tesla has once again returned FSD Transfers for North America. This comes after some new details we received on FSD Supervised and Unsupervised at the recent Q1 2025 Earnings Call.

FSD Transfers

This latest round of FSD transfers doesn’t have a specific time limit - so if you’re in the market for a new vehicle and were worried about transferring FSD from a HW3 vehicle - now is the best chance.

This transfer opportunity is applicable for any new vehicle purchases, including the Model S, 3, X, Y, as well as the Cybertruck. The only vehicles it doesn’t apply to are the Foundation-Series Cybertruck or a Launch-Series Model Y, which already come with FSD included.

If you’re conducting an FSD transfer, you’ll need to reach out to your Tesla delivery coordinator through the Tesla app to confirm you’re eligible and to get the process started.

Note that once you take delivery, FSD access is removed from your older vehicle, regardless if you plan to trade in your vehicle or keep it.

Canada and Mexico

For those in Canada and Mexico, there’s some good news. This opportunity is available for customers in those countries as well, however, new vehicle orders are currently paused in Canada and Mexico for unknown reasons.

Running Offers

There are also several other offers running in North America, with the country flags indicating which countries their available in:

0% Financing on new Model 3 Orders (60mo, 0.99% for 72mo) 🇺🇸

Deep Blue Metallic and Pearl White are currently free on a new Model 3 Performance 🇺🇸

Original Model Y Owners are receiving $2,000 off the purchase of a Refreshed Model Y 🇺🇸 🇨🇦 🇲🇽

Free Supercharging on the Model S and Model X 🇺🇸 🇨🇦 🇲🇽

Free Supercharging on the Foundation-Series Cybertruck 🇺🇸 🇨🇦 🇲🇽

Inventory Vehicle Discounts 🇺🇸 🇨🇦 🇲🇽

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