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Tesla’s long-rumored affordable electric car may have just shown its face again—sort of. A camouflaged test vehicle was recently spotted at Giga Texas, stirring speculation that it could be the elusive “Model 2” or “Model Q.” These sightings, along with official updates from Tesla, offer a rare glimpse into the EV giant’s 2025 plans. Meanwhile, Tesla’s robotaxi ambitions are under government scrutiny, Elon Musk is heading to Saudi Arabia for a high-profile investment summit, and the company’s stock price is surging on news of a U.S.-China trade breakthrough.
Let’s break down the major developments:
Tesla’s Compact EV Spotted Again in Texas
Recent drone footage from Joe Tegtmeyer shows what appears to be a compact Tesla test vehicle, partially covered and parked next to a Model Y at Giga Texas. Although the vehicle lacks body panels and a roof, its overall shape and wheel design resemble the Model Y—but more compact.
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Tesla’s Affordable Models on Track for 2025
During the Q1 2025 earnings call, Tesla confirmed that production of new, more affordable EVs is still expected in the first half of 2025. According to Lars Moravy, Tesla’s VP of Vehicle Engineering, the affordable cars will look similar to current models but with significantly reduced costs.
These vehicles are aimed at expanding Tesla’s market share globally by entering price-sensitive segments. They are expected to resemble the Model 3 and Model Y in design and function, but be built with streamlined production techniques and possibly using Tesla’s next-gen vehicle platform.
Robotaxi Platform Faces Government Probe
Tesla’s Robotaxi rollout, already running internally in Austin and San Francisco, is now facing federal scrutiny. The NHTSA has formally requested detailed information about how Tesla’s Full Self-Driving (FSD) system handles poor visibility conditions, such as rain or fog.
The inquiry is part of a broader investigation into the safety and reliability of Tesla’s autonomous driving features. The agency is particularly interested in how FSD updates have been implemented and whether they effectively address known crash risks in challenging environments.
Elon Musk Invited to Saudi Investment Forum
Reuters reports that Elon Musk has been invited to a major Saudi-U.S. investment summit in Riyadh. The event will host top executives from global giants like IBM, Boeing, and Citigroup. Musk’s invitation follows Tesla’s recent launch in Saudi Arabia, which featured a showcase of key products including the Cybertruck, Optimus robot, and the self-driving Cybercab.
This marks a thaw in relations between Musk and Saudi Arabia after past tensions involving the Public Investment Fund (PIF), especially following Musk’s 2018 “funding secured” tweet fiasco.
TSLA Nears \$1 Trillion Valuation on U.S.-China Trade Deal
Tesla’s stock jumped over 8% in Monday’s premarket, reaching \$322.56 per share. The surge was driven by reports of a 90-day tariff rollback agreement between the United States and China. The move benefits Tesla directly, as China remains a crucial manufacturing and sales market for the EV maker.
This bump could push Tesla back to a \$1 trillion market cap—territory it hasn’t touched since early 2023. The market momentum also signals renewed investor confidence as geopolitical tensions cool and the EV market stabilizes.
What Undercode Say:
Tesla’s aggressive pace of innovation is showing no signs of slowing down. The recurring sightings of a compact test car are no coincidence—they are a clear indication that Tesla is rapidly advancing its efforts toward market democratization with a true mass-market EV. The timing aligns with Tesla’s strategic commitment to affordability and increased global penetration.
What makes the Model 2—or “Model Q”—especially important is its potential to unlock entirely new demographics, particularly in emerging markets where vehicle affordability remains a major barrier. If Tesla delivers a \$25,000 EV with a 250+ mile range, it could shake the entire automotive landscape, much like the Model 3 did in 2017.
Meanwhile, the robotaxi platform, while still in internal use, presents both a tremendous opportunity and a significant regulatory hurdle. NHTSA’s inquiries are not just red tape—they are reflections of valid public concerns. Tesla’s ability to respond transparently and demonstrate safety compliance will be key to broader acceptance.
Musk’s diplomatic re-engagement with Saudi Arabia is noteworthy. Beyond public optics, it signals potential for deeper investment collaborations in the MENA region, especially in EV infrastructure and autonomous tech. Saudi’s Vision 2030 aligns well with Tesla’s sustainability goals, offering mutual benefit.
The market’s reaction to U.S.-China trade easing also highlights Tesla’s critical positioning in both regions. The fact that Tesla benefits from tariff reductions despite its strong domestic supply chain speaks volumes about its global reach and vertical integration.
In summary, Tesla is threading several strategic needles at once: expanding production, navigating regulatory hurdles, managing diplomatic relationships, and riding macroeconomic tailwinds. If it manages to execute on its compact EV, stabilize FSD, and maintain investor confidence, the next 12 months could be transformative.
Fact Checker Results:
The Giga Texas and Fremont test car sightings are confirmed by trusted drone operators.
The NHTSA letter to Tesla regarding Robotaxi operations was officially issued on May 8.
TSLA stock indeed surged over 8% in premarket trading as reported by Barron’s and ABC 12.
Prediction:
If Tesla launches its affordable EV by mid-2025, it could boost global sales by up to 40% year-over-year, especially in price-sensitive regions like Southeast Asia, South America, and Eastern Europe. Simultaneously, a successful public Robotaxi rollout by late 2025—assuming regulatory approval—could establish Tesla as a serious contender in the autonomous mobility space, potentially unlocking billions in new revenue streams. With geopolitical partnerships stabilizing and production lines optimized, TSLA could realistically hit and sustain a \$1.2 trillion market cap within 18 months.
References:
Reported By: www.teslarati.com
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