According to a post on Chinese social networking site Sina Weibo, the first prototype of a $25,000 Tesla hatchback has been built.

Based on previous rumors, the car may be called the Tesla Model 2, a cheaper and more compact alternative to the Tesla Model 3. Considering that the Model 3 starts at $35,000 and the price skyrockets as the model goes up, a cheaper Tesla would certainly make it easier for people to get on the EV train.

According to InsideEVs, the sources of this rumor are quite reliable. While we are still skeptical, especially since Tesla has a reputation for delaying their cars, this is compelling evidence that we can expect inexpensive Tesla cars in the not-too-distant future.

When will that be? If a prototype has been built, testing will likely begin soon, and we may see this rumored hatchback next year or in 2023.

If Tesla develops a truly inexpensive EV, it is likely that other traditional automakers will develop more affordable EVs as well. While there are more electric vehicles than ever before, many of them are far from inexpensive, and the environmentally conscious tend to opt for hybrid cars over fully electric vehicles.

However, this week brought some good news on this front. President Biden just issued an executive order calling for 50% of new cars sold in the U.S. to be electric by 2030, which may spur momentum in this market.

Not much else is known about this $25,000 Tesla, except that Elon Musk has confirmed that the company is working on such a car. And apparently, this EV will use a newly designed battery that is 35% smaller than the batteries in other Tesla EVs, allowing the eclectic automaker to develop a more compact vehicle.

A smaller vehicle with a more compact battery that is said to have a 16% increase in range per kilowatt could lead to an overall reduction in EV weight. If Tesla can build an affordable car with range and technology that contributes to the appeal of Tesla vehicles, Tesla could be a winner.