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According to our project requirements, We need to create more than 2000 subsites under single site collection in SharePoint online (Office 365).

MSDN article says that you can create Up to 2,000 subsites per site collection. https://support.office.com/en-us/article/SharePoint-Online-software-boundaries-and-limits-8f34ff47-b749-408b-abc0-b605e1f6d498

While this article says that you can create Up to 100,000 subsites per site collection. http://geekswithblogs.net/ThorvaldBoe/archive/2015/12/18/finding-the-maximum-number-of-sub-sites-in-sharepoint-online.aspx

So exactly how many subsites can we create?

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I tried contacting Microsoft for the same requirement but I found this question is already answered by Microsoft support team.

The reply from Microsoft Team was like

Currently, the sub site limit is 2,000 for Office 365 subscriptions. We can see the limit here: SharePoint Online software boundaries and limits. For any changes, we will update the News in our Office 365 roadmap.

You can find this thread here.

Now the actual point. The article which says that the sub site limit is 100,000 is written on Sep 17,2014 and they say that Microsoft has increased the limit in last 6 month while the Microsoft says its still 2000 on November 20,2015.

So we can't say anything until we personally don't try. The procedure used in this can be used to try and find actual limit. The variation may be due to subscription plan or available storage.

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I think 2000 subsite per site collection is just a threshold value.

There will be impact on performance if your subsite count is more than 2000.

Thats why Microsoft recommends upto 2000 subsites per site collection.

https://support.office.com/en-us/article/SharePoint-Online-software-boundaries-and-limits-8f34ff47-b749-408b-abc0-b605e1f6d498

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There is no exact number. These are the relevant figures:

2000 - recommended maximum, after which there may be a performance decrease (Both On-Premise and SPOnline). This figure in reality depends on hardware/subscription level.

250000 - hard limit for On-Premise 2013 (There does not appear to be a published hard limit for SP Online)

100000 - hard limit for SharePoint Online as quoted by Metalogix, but there is no other evidence.

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I think that the official source is https://support.office.com/en-us/article/sharepoint-online-limits-8f34ff47-b749-408b-abc0-b605e1f6d498 and the last updates (August 2018) confirming that the Subsites limit for a single SPO Site Collection is 2000.

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