Why Tesla Avoided an Affordable EV Hatchback at Launch

At first, EVs were basically impossible to make cheap—the tech was just too expensive, and even Tesla couldn’t manage it. I might be wrong, but I don’t think Tesla ever wanted to make a cheap car. It was really the Chinese automakers that cracked that code.

Thing is, developing a car isn’t easy or cheap, and that goes double for EVs since the tech is still pretty new. Basically, when you’re building an EV, you’re building a whole new car with unfamiliar technology, and making it affordable is hard—especially for certain types of vehicles. I think most manufacturers get that, and they don’t really see cheap EVs as realistic. They’d rather design something that actually makes financial sense than try to cram EV tech into a budget model. Tesla seems to feel the same way.

The only real way to make a cheap car is to sell a ton of them and spread out the production costs across all those units. Tesla didn’t have the money to do that early on. So instead, they built an expensive sports car that blew everyone away and got a ton of attention—without spending a dime on advertising. Then they bootstrapped their way into becoming a major automaker with a string of impressive technical achievements. Making a cheap car just wasn’t profitable for them, and they didn’t need to go there.

Back in the early 2010s, Tesla was probably the best value EV brand for what you were getting. They had a solid charging network (at least in the US), and their tech was ahead of the curve. I don’t think they felt much pressure to build a cheap EV back then—there wasn’t really any competition. It was kind of like Apple with the iPhone: they never bothered with budget models. Their cheapest option was the SE, and even that came later.

I don’t think Tesla ever seriously thought about making a cheap car—not even once—at least not until they started seeing Chinese cars slowly take over the market. And honestly, I get why. They probably already spent a ton of time and money developing their cars and realized that building a truly cheap one just wasn’t doable.

I mean, take the Model 3—their most affordable car—it’s as bare-bones as it gets. If you’ve ever owned or ridden in one, you know what I mean. There’s not much going on inside. So maybe Tesla didn’t even think about making a budget model until just the last few years. They probably figured it wasn’t worth the effort or thought it just wasn’t possible. And to be fair, Tesla has done pretty well targeting the middle class.

And then there’s the “shorter range” thing. That’s a huge compromise, and probably one Tesla didn’t want to make. Range is a big deal when it comes to EVs—it’s one of the first things people look at. If you cut that to save money, it might hurt the brand. And Tesla’s got a name to protect. Making a cheaper car with less range just might not have been realistic for them at the time.

You can kind of see this attitude in the way they’re handling their so-called "cheap Tesla." It feels like they’re only doing it because they have to. Not because they actually want to. Chinese EVs are blowing up, especially in their home market, and Tesla doesn’t want to lose that space. They want in on that success too. So now, suddenly, they’re trying to make a more affordable car. But aside from that pressure, there probably isn’t much else pushing them to do it.

Honestly, I think it all comes down to perspective. Tesla hasn’t been interested in cheap cars, and they didn’t think it was necessary. Only now, after seeing that EVs can be made cheaper, are they finally shifting gears. Before that, they just priced their cars based on what it cost to make them. It's only recently that they started to see a real need for budget EVs, mostly because they don’t want to get left behind by China. If it weren’t for that competition, I doubt they’d bother. Cheap cars are kind of the bottom tier of a brand, and companies usually avoid that space if their mid-range stuff is selling well. That’s probably how Tesla sees it.