The rumor mill is working overtime over reports that Tesla has begun the process of certifying a new car for sale in China. That procedure begins with an environmental impact assessment, which is now underway according to Chinese news source Australia’s motoring magazine The Driven is reporting Tesla may begin selling a hatchback car based on the Model 3 later this year. Known informally as the Model 2, the car is said to be the first to be designed at Tesla’s China Design Center and will be manufactured on a new assembly line being built at the Gigafactory in Shanghai. The sale price is said to be 160,000 yuan, or just under $25,000.

Bear in mind all of this is rumor. Tesla has not confirmed the report. (Nor has is denied it.) The new, smaller Tesla will be officially unveiled to the public at the Guangzhou Auto Show in November according to Chinese news reports. There are some sketches floating around the internet. There is a 5-door hatchback concept at that seems like it could be close to what a production ready car might look like. Perhaps. It’s handsome in a utilitarian sort of way and is reminiscent of the late Opel-built Astra, which is not a bad thing.

Range of the “Model 2” is rumored to be between 350 and 450 kilometers measured by the highly optimistic NEDC test standard. A common rule of thumb is to divide by 2 and add a skoosh to get an idea of what the EPA equivalent might be. That could be a moot point since there is no indication Tesla would sell the car in the US, where anything shorter than 18 feet in length is considered too small for American tastes.

While US customers (with the exception of CleanTechnica readers) would turn up their noses at such a small car, there are plenty of places in Europe, Africa, India, and South America where a reasonably priced car like the Model 2 could be hugely popular. Keep in mind that Tesla has already begun shipping Chinese made Model 3s to Europe.

The runaway electric car sales leader in China these days is the minuscule HongGuang Mini EV made by Wuling, a joint venture with General Motors. It sold 33,000 units in December compared to 23,000 units for the Model 3. Then again, its base price is a paltry $5,870, which means it competes in an entirely different market segment than the Tesla. But moving down market would help Tesla become the change agent it set out to be over a decade ago.



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