Tesla has published an official teaser image of its next electric car, expected to be the much-anticipated Model 2 entry-level hatchback.

Tesla says it has two new products in development

The image was revealed by CEO Elon Musk at the firm’s 2023 Annual Shareholder Meeting in the US and reveals a silhouette with clear links to the firm’s larger models.

“People always want to know what our next product is but this is not the time to,” said Musk. “We obviously need to have a proper dedicated product launch. I just want to emphasise that we are actually building a new product, we are actually designing a new product – we’re not sitting on our hands here.”

It’s one of a pair of new models in development, which Musk said could sell “in excess of five million” units once production has ramped up at a new factory being built in Mexico.

He commented: “There are two new products that I think you’ll be very excited about. Both the design of the products and the manufacturing techniques are head and shoulders above anything else that is present in the industry.”

The new ‘baby Tesla’ has previously been teased in a social media video and will bring a rival to models such as the ID.3 and MG4. It’s expected to share technology and powertrains with Model 3 and Y and will sit under the former, bringing an entry-level model that could open up EV ownership to more drivers. Prices could begin at around £25,000 according to reports.

Tesla was widely expected to reveal the ‘affordable’ Model 2 at its annual Investor Day in March. Instead, Musk reiterated the target to grow production from 1.3 million EVs in 2022 to 20 million EVs in 2030 but without specifying future products. He also revealed plans to slash production costs and ramp up output in the brand’s ‘Masterplan 3’ and announced the new factory in Monterrey, Mexico.

No details of the other vehicle were mentioned in yesterday’s Shareholder Meeting but it’s likely to be either the Model 3 refresh or the delayed Cybertruck.

The US brand confirmed this month that production of its right-hand drive Model S and X models has stopped in a move to reduce production costs and complexity. It’s said that drivers and fleets can either switch to reservations for Model 3 or Model Y and receive a £2,000 credit, purchase Model S as a left-hand drive vehicle or just cancel their reservations.