Chiming in on the Debate: Who Will Save Us if the Model 2 is Delayed?

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After the article from our editor Zachary regarding the most likely replacement for a “Model 2” (and a followup here), and after having a brief exchange in the comments, I was left thinking. My original response was simple and straightforward … yet the more I think about it, the more nuanced things seem to become. And everything is boiling down to one question: how do we exactly define what a “Model 2” should be?

Before we proceed, I must clarify something. I’m kind of an irrational optimist, and I still have hopes that the robotaxi will be built on the same platform as the Model 2, so there will be little or no delays for the latter. I also agree with most of what Zach has written and believe that Tesla’s global presence and clout is something no other automaker can dream of, and, as such, any “alternative Model 2” will be more limited in its scope.

But is this necessarily bad? Originally, I thought so. Now, I’m on the fence. For I believe that the answer to what a “Model 2” should be can vary greatly from region to region, and as such, it isn’t a bad thing to have different companies leading in different places.

To start with, here are my thoughts about what I think a “Model 2” would look like for the US/Canada, Europe, and Latin America. I won’t mention China: that market is diverse enough to have already covered most segments with affordable EVs, so the Model 2 would’ve been unlikely to be the driver of massive EV adoption anyways.

#1: USA/Canada

I’m not talking about “North America,” because as far as its vehicle market goes, Mexico is more similar to Brazil or Chile than to the US and Canada.

These two countries have a lot of space, probably the most developed road network in the world, abysmal public transportation, and a fascination with large, SUV-like vehicles. I find a Model Y or a BYD Song to be very large vehicles, but in the US, these are merely “mid-sized.”

They’re also a very particular case, as far as — in my opinion — this “Model 2” alternative already came and went in this market … sort of, at least. I’m talking about the Chevy Bolt EUV: an affordable, reliable, no-frills-added CUV with decent range and reliable software (Ultium, anyone?).

The Bolt EUV was not perfect: it lacked a decent platform, including not quite enough cargo space for most Americans. Its decent range did not pair with decent fast-charging capabilities, making it unappealing for the long-distance-driving American public. It was a tad small for the US market, where the most popular vehicles are at least one segment above (not including pickup trucks). More importantly, it seems like it was never planned as a mass-production vehicle: its sticker price was only affordable in the US (not even in Canada), and, when it arrived in Latin America, it did so at around $50,000 (which I believe was closer to the “real” price it needed to be to make a profit).

Still, with a few improvements, the $27,500 Bolt could’ve been much more of a hit than it was. So, who’s in line to present something like that in the near future? Only two possible candidates come to mind:

First, and sadly the one I find less likely to: GM. It has already said it plans to re-launch the Bolt with Ultium tech. GM could make it a bit larger and fix the issues with charging and cargo space, and I’m certain it would be a hit … but will it be in production this year? Will it ramp production in 2025? I doubt so.

The other alternative as far as GM goes is the Equinox EV, which if sold at $35,000, could compete nearly head to head with ICE vehicle best sellers in its segment (which is one of the most popular ones). However, I don’t trust GM will be willing, or even able, to build this affordable option in large numbers, and I believe it will focus in the most expensive trims.

(Yeah, yeah, I know the average vehicle price has climbed well over $40,000 in the US, but that average is skewed by a few very expensive luxury vehicles. We need the median price, which I have not been able to find, but the most sold vehicles in this segment — Nissan Rogue, Honda CR-V, Toyota RAV4 — are well under $40,000 in most or all trims.)

Second, the one I actually have high hopes for: Hyundai/Kia. Specifically, the Kia EV3, which if all goes well should already be in production in late 2024 and priced well under $35,000.

If Kia manages to launch the EV3 at less than $33,000, it will cost almost the same as all of its ICE vehicle competition, and as the Chevy Bolt (inflation adjusted) did a few years ago with none of its issues, a mass-market approach (I hope), and a slightly larger frame. Sure, it will (mostly) not have access to the $7,500 tax rebate … but I think that’s fine. I think GM, Ford, etc. know that this rebate won’t last forever, and that depending on it comes at a risk: sales could collapse if the rebate is suddenly finished (not unlike what we are seeing in Germany). Kia, meanwhile, has no such preoccupation. The only thing I find worrisome is whether the EV3 will be able to pack a decent battery (>60 kWh) for that price.

Ford (with its “skunk” team), Rivian (with the R3), and of course Tesla will eventually arrive here, but I expect that to be in 2026 at best, 2027 more likely.

So, what’s a “Model 2” in the US and Canada? In my opinion, it’s a CUV or small SUV, at least 4.4 meters (173 in) long, packing at least a 60 kWh battery, managing at least 100 kW peak fast-charging (some 25 minutes 20–80%), and costing $30,000 at most in a readily available starting trim. Feel free to comment if you disagree on this perspective.



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#2. Europe

It’s sort of a trope that Europe’s vehicle taste differs from the US, and, despite being highly diverse, taste remains somewhat constant within the region. I thought it was mostly a myth. I’m not so sure now.

Looking at the 10 most sold models and taking out the Tesla Model Y (the odd one from the pack), we see a pattern emerge. Renault Clio. Peugeot 208. Opel Corsa. VW Golf. Most of the top 10 are hatchbacks on the smaller side, the only exceptions being small CUVs (VW T-Roc, Toyota Yaris Cross), one city car, and one sedan.

(As a side note, the Model Y is the most expensive, the largest, and the only electric one on this list. May this be a testament to the unparalleled value-for-money Tesla offers in the European market.)

All these cars are smaller than their US counterparts. All are cheaper, sometimes quite a lot cheaper. I take this to mean that if we took our archetypical US “Model 2” (4.4m+, SUV-esque, €33,000 starting price), it would be likely to sell well, but not so likely to conquer the market. For that, we need a smaller vehicle (perhaps 4 to 4.2 meters long), we can do with a smaller battery (50 kWh, perhaps even 40 kWh) … and we need a much, much lower price.

Herein lies the issue.

The Dacia Sandero, second only to the Model Y, starts at some €13,000. The Renault Clio starts at €14,000. Now, to be fair, these are the cheapest ones on the list — the Corsa starts at some €22,000 and the Golf at €25,000.

What this means is that while a more expensive (and comparatively larger and more luxurious) vehicle may do the trick in the wealthier nations, a more affordable one is needed in the south and the east of the continent. With that in mind, what’s on the horizon here? If we exclude vehicles coming from China, only a couple candidates arise.

The first one, and my favorite, is Renault.

Leader of the European EV market for years, Renault built a winner with its early Zoe, and it’s aiming for similar success with the upcoming Renault 5. This car is slightly smaller than our archetypical “European Model 2” (3.9 meters, 153 in), quite a bit more expensive (€25,000 for the entry version), and not as well-equipped battery wise as we would wish (40 kWh for the entry version). Regardless, so long as it makes a profit on it, Renault will gain an edge and that may allow it to ramp up production before its competition, something critical if an automaker is to reach the economies of scale needed to compete with China.

The second one is Stellantis, and specifically Citroën. Carlos Tavarez has said before that the company is already making a profit on the (overpriced) EVs it sells in the European market, and it’s planning to upstage the Renault 5 on every single metric with the upcoming Citroën e-C3: it offers 4 meters to Renault’s 3.9, it offers a 44 kWh battery to Renault’s 40 kWh, and most importantly, it offers a starting price of only €23,000 to Renault’s €25,000.

This means that, according to my analysis (and feel free to comment if you think I’m missing the mark here), the Citroën e-C3 is the closest car we have to our “European Model 2.” It’s still too bland for the wealthiest markets, and too expensive for the less wealthy ones, but it’s getting close: given the high European gasoline prices, it could well become a true mass-market car if only it got €4,000 cheaper or so, breaking the psychological barrier of €20,000.

Some of you may have noticed I haven’t mentioned VW here. Well, the automaker may be the third best EV seller worldwide … but I feel it’s lost. It’s offering the ID.4 and ID.3 at higher prices than the competition, it has delayed plans for its more affordable ID.2, and I don’t see it lowering prices anytime soon. I feel VW should have the expertise and scale to offer an e-Golf only 20% or so more expensive than the ICE version by now … but alas, it’s clear it doesn’t, and that puts it at a disadvantage.

As for why I prefer Renault over Stellantis, even if I believe the e-C3 is objectively the better car, it’s just that I like Renault and I don’t trust Stellantis. Sue me.

#3. Latin America

When I wrote my original comment, I was thinking about the “Global South,” but after checking a couple of South-East Asian markets, it became clear I was severely underestimating the task. Besides, I have no idea what’s being sold in Central Asia, in the Middle East, or in most of Africa. So, I’ll stick with what I know.

Latin America may be huge, and it may be diverse, but as far as cars go, it sorts of acts like Europe. Well, almost, because it tends to prefer cheap CUVs to cheap hatchbacks, but you get the gist. So, for our “Latin American Model 2,” we have a less strict size (it could be from 3.9 to 4.3 meters), we definitely need higher clearance, and the battery … well, it depends. 40 kWh may be enough for Costa Rica or Ecuador; 50 kWh will be the minimum for Mexico, Colombia, and Chile; and Brazil and Argentina may need as much as 60 kWh.

Price is the main issue. Gasoline in the region is relatively cheap, and incomes are not high, so it’s likely that a best-seller will need to be very close to the cost of its ICE vehicle competition. Anything over $23,000 for the entry level will certainly be too much. If we’re talking about a smaller vehicle, I’d say $18,000 is the max.

The good news is: there are no local players! And because of this, most countries can freely import vehicles from China (yes, even Mexico: the USA’s conditions seem to a hindrance to Chinese factories, but not Chinese cars per se) and/or freely host assembly lines from Chinese brands. This means that the bloody competition going on in China will slowly but surely move to Latin America.

We’re already seeing it. Last year, Geely arrived in Costa Rica with its Geometry E, triggering a price war and rapidly climbing to the podium. BYD did the same in Brazil when it lowered the price of its BYD Dolphin, increasing sales 700% in a few months, and it did it again in 2024 with the BYD Seagull — first in Mexico, Brazil in Uruguay; later on in Chile and Colombia, creating havoc in every single market it touches.

And this won’t be exclusive to Latin America. In a way, there won’t be “a Model 2” for most of the developing world: so long as Chinese automakers can enter without restriction, there will be many.

Regardless, what would be this “Latin American Model 2?” I’ll make a bet: as much as the local markets have advanced towards price parity, EV costs are still too high, but a new generation is coming that may do the trick. And amidst this new generation, there’s a high-clearance, no-frills-added, hyper affordable SUV-esque car, one that just came out in China, from a company leading the price wars all over the region. BYD isn’t pulling punches, and once this car is ready, I think it will arrive at sub-$25,000 prices, triggering the last stage of the fight between EVs and ICEVs.

I’m talking about the BYD Yuan Up.


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