A lower-cost Tesla Model 2 or “Model 2.5” could be coming late this year, but opinions differ on what it will look like.

Following Tesla's first-quarter earnings conference call on Tuesday, two schools of thought emerged about Tesla's next affordable vehicle (or vehicles). One school says the long-awaited Model 2 is the next low-cost car, while the other says something different is in the works. We call it Model 2.5. One thing is clear, there is some sort of new, low-cost vehicle in the pipeline, though Report otherwise.

During the call, CEO Elon Musk discussed future low-cost vehicles — albeit briefly — explaining that the new “affordable” vehicles build on aspects of both the next-generation platform and existing platforms. Tesla “will work to accelerate the launch of new models until late this year or early next year.” (More here.)

Some Wall Street analysts interpreted these statements as a reaffirmation of the “Model 2,” the nickname given to the next-generation low-cost car. “They're not going straight to autonomy,” said Dan Ives, managing director of Wedbush Securities. He said on CNBCIn reference to Robotaxi. “A Model 2 is going to go for under $30,000, and that's accelerating,” Ives said.

“Discontent”: Other analysts are more skeptical. “Anyone expecting an all-new model from Tesla will certainly be disappointed, but modifications beyond the surface level will occur to some existing models,” Evan Drury, Edmunds' director of insights, told me in an email. Drury said modifications to Tesla's current production methods could lower costs for all cars produced, but even cheaper models may also be possible by “removing content” from existing models and focusing on just the basics.

Believe me when I see it: Autoweek editor Natalie Neff was harsher in her assessment after hearing Musk's comments. “Tesla had hooked potential buyers and Wall Street for about three years with the promise of an affordable entry-level car, this so-called Model 2, that was not only supposed to put the coveted brand within reach of millions, but was also supposed to ‘serve as a Testing a bunch of new technologies,” she told me in an email. “I'm skeptical of everything they promise now, new platform or otherwise. “At this point, this was a well they went to a lot,” she said. The affordable $35,000 “standard Model 3” lasted a minute and the Roadster hadn't arrived yet, “and the Cybertruck took four years to reach production, a full two years after it was promised,” Neff added. So, she's still very skeptical about Model 2. “Basically, I'll believe it when I see it,” she said.

The updated Model Y will: Sam Fiorani, an analyst at Global Vehicle Forecasting, said the updated Model Y could be Tesla's most important vehicle in the near term. “Tesla is developing methods to make its current products less expensive,” he said. He added: “The current market does not provide sufficient demand for Tesla’s production capacity, especially with increasing competition. The updated Model Y will lead this wave of improvements in 2025, he said.

Let's forget: Finally, let's not forget what Musk said last January when he used words like “deep” to describe the design of the next generation car during… Q4 2023 earnings conference call “We have come a long way in developing our next-generation low-cost car,” he said. He also discussed Tesla's future “revolutionary manufacturing system” that will be used to build the car. He described it as “far more advanced than any other automotive manufacturing system in the world.”