Musk confirms the Model 2 will be born in Berlin

Elon Musk said this while visiting the plant. Meanwhile, Volkswagen prepares to counter-attack

By: Eleonora Lilli

Mar 15, 2024 at 6:19am ET

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Like it or not, Tesla will expand its Berlin factory. There seems to be this message implied in Elon Musk's speech at the German plant on Wednesday. The CEO, who visited the factory after production had been halted for about a week due to an arson attack claimed by an environmental group opposed to the expansion of the site, confirmed that the Model 2 will be built here and that the electric Semi-truck currently being built in Nevada, USA, will probably follow. Ergo: the factory (disputed since its inception) is to be expanded.

In the meantime, Volkswagen is preparing to counter-attack. Since the Model 2 is expected to be sold from 2027, the Wolfsburg brand has announced the launch of an entry-level electric vehicle within the same year. CEO Thomas Schaefer explained that four project teams are already working on some ID.1 proposals (the name is provisional, but it says a lot about its place in the range).

The sub-£20,000 car

The electric car 'has been' a big challenge for car manufacturers. We could almost speak of it in the past tense, as the range of models is now very varied and 'democratic'. Now it is a question of making it accessible to more and more people, which, translated from the manufacturers' point of view, means being able to put something on sale that is not too expensive (the question of a widespread recharging network is another matter).

Il progetto di espansione della Gigafactory di Berlino

The Model 2 (promised for less than £22,000) is crucial for Tesla, because it would allow it to compete with a growing number of cheap electric vehicles on the way (Chinese in the lead, think of BYD, which by the way has every intention of coming to produce cars in Europe). The Tesla Model 2 is expected to start production in the US next year, but will only reach adequate production volumes two years later (2027).

Tesla Model 2, the Motor1.com render

In this context, a brand born for the people like Volkswagen certainly cannot stand idly by, all the more so since its competitors will be producing at home (in Germany).

Volkswagen's counter-attack

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In order to compete with the Americans of Tesla and the Chinese of various brands, as well as all other 'traditional' car manufacturers, the Wolfsburg company plans to launch 11 new electric vehicles over the next three years, starting with the ID.2 announced for 2026 at a price of around €25,000 (approx. £22,000).

Volkswagen ID.2all

However, there will also be models developed in cooperation with the Chinese manufacturer Xpeng for the Chinese market. Volkswagen Group CEO Oliver Blume said that a decision will be made this year on an entry-level model at around €20,000 (£17,500). 'We are working conceptually on a solution and do not exclude collaborations in this area,' he said.