It looks increasingly likely that the much touted $25,000 entry level Tesla known colloquially as the Model 2 will not be built.

Key Takeaways Tesla is set to produce and launch a lower-cost Model Y vehicle in China likely in 2026, Reuters reported Friday—citing people with knowledge of the matter.The vehicle will also eventually be launched in Europe and North America,

Sources say the new EV will be a smaller Model Y, with mass production starting in 2026. Local rivals like BYD are eroding Tesla’s market share, prompting a new affordable model. The new electric car will reportedly be produced in China,