My take on the wording is that the unboxed next gen $25k model 2 is totally still a thing, and thats what mexico is for.
In the interim, we will get model 2.5, built on the same line as 3/Y (or at least in the same factory), that probably shares SOME components with 3/Y.
But I don't think they would make a big deal out of just offering a model 3 with a smaller battery or even a hatchback model 3.
Also from a branding POV, it would make sense to have model 2.5 entry level compact, then 3/Y crossover and S/X full size.
My model Y has so much luggage space its actually inconvenient. Even a weekly grocery shop just rattles around back there