Although still a rumor, the new Tesla Model 2 all-electric hatchback/subcompact might well be on its way to becoming the newest electric vehicle (EV) in the growing stable owned by Tesla, Inc.

CEO Elon Musk hasn't outright declared there is a Model 2 in the works but his repeated emphasis on an EV costing only $25,000 -- the cheapest Tesla yet -- clearly points to a new EV, which will also probably be the company's smallest car to date. The Model 3, Tesla's cheapest, starts at under $40,000 in the United States.

Musk gave a lot of hints pointing to what pundits like to call the "Model 2" at the company's infamous Battery Day last August 23. Musk and other Tesla executives gave long and detailed technical reviews about the progress Tesla's making in producing the batteries for its EVs in-house.

Musk revealed plans to produce a cheaper, lower-cost battery. He also unveiled a strategy allowing Tesla to mass-produce its own battery cells that will increase range by more than 54%, slash battery costs per kWh by 56% and cut investments by 69%.

What all these incremental improvements will lead to is a Tesla EV costing only $25,000. Musk also said Tesla also eventually plans to produce 20 million EVs a year by 2023.

During Battery Day, Musk said the $25,000 Tesla EV will have "fully autonomous capability." Musk uncharacteristically didn't boast about a delivery date, but his many hints confirm the Model 2 is on its way, thanks to cheaper batteries.

Some tech pundits assert the Model 2 will have at least 300 miles of EPA range. The Model 2 will be fast because all Tesla EVs are fast.

It can be expected to sprint from 0 to 60 mph (97 km/h) in under 6 seconds. It's not expected to come anywhere near the ridiculously fast tri-motor Model S Plaid -- the fastest EV on the planet -- which can hurl itself to 60 mph in under 2 seconds.

There are also rumors of Tesla planning a small hatchback/subcompact. Tesla began teasing designs of this smaller car back in January. The car's smallness can also help explain the $25,000 price tag.

Pundits also claim the $25,000 price tag will make the Model 2 competitive against its main target: the popular Volkswagen Golf. The latest Golf model, the gasoline-powered Mark 8, retails for just $29,000. This gasoline versions of this venerable family car first made it appearance way back in 1974.