Tesla claims to have produced the “first builds” of its new “more affordable” electric car models, which are expected to be stripped-down versions of the Model 3 and Model Y.
Since last year, Tesla has discussed launching “more affordable models” based on its existing Model 3/Y vehicle platform in the first half of 2025.
The first half of 2025 came and went, and Tesla didn’t launch any new “more affordable” models.
With the release of its Q2 2025 financial results today, Tesla is trying to get semantic and says that it has produced the “first builds” of “a more affordable model” in June:
We continue to expand our vehicle offering, including first builds of a more affordable model in June, with volume production planned for the second half of 2025.
Now, the automaker talks about launching the vehicle “in 2025” and again claims to have stuck to its “1H2025” timeline with the “initial production”:
“Plans for new vehicles that will launch in 2025 remain on track, including initial production of a more affordable model in 1H25.”
There’s confusion in the Tesla community around Tesla’s upcoming “affordable” vehicles because CEO Elon Musk falsely denied a report last year about Tesla’s “$25,000” EV model being canceled.
The facts are that Musk canceled two cheaper vehicles that Tesla was working on, commonly referred as “the $25,000 Tesla” in early 2024. Those vehicles were codenamed NV91 and NV92, and they were based on the new vehicle platform that Tesla is now reserving for the Cybercab.
Instead, Musk noticed that Tesla’s Model 3 and Model Y production lines were starting to be underutilized as the Company faced demand issues. Therefore, Tesla canceled the vehicles program based on the new platform and decided to build new vehicles on Model 3/Y platform using the same production lines.
We previously reported that these electric vehicles will likely look very similar to Model 3 and Model Y.
In recent months, several other media reports reinforced this, and Tesla all but confirmed it during its latest earnings call, when it stated that it is “limited in how different vehicles can be when built on the same production lines.”
In recent weeks, a slightly camouflaged prototype resembling almost exactly the Model Y has been spotted around Tesla’s factory in California.
The vehicle is expected to be the “stripped-down” Model Y, which will feature lesser material, fewer features, and possibly be slightly smaller.
It is rumored to start at around $35,000.
The Model Y currently starts at $45,000 in the US before any incentive.
Electrek’s Take
I previously speculated that Tesla might wait to launch the stripped-down, cheaper models in the US until after Q3 to take full advantage of the demand that will be pulled forward due to the end of the $7,500 federal tax credit starting in Q4.
Things are currently aiming in that direction.
Ultimately, I think it will help Tesla increase volumes slightly, but there will be significant cannibalization of its existing lineup. I predict that it will not compensate for the decrease in sales.
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