New More Affordable Tesla Turns Out to Be a Stripped-Down Model Y
Tesla says production of the less expensive Model Y began in June and that it would go on sale in the fourth quarter of this year.
Tesla
Tesla is launching a new entry-level model, but CEO Elon Musk confirmed that it is just a more bare-bones version of the Model Y SUV.
Tesla says production of this new variant started in June and will ramp up by the end of the year, with sales set to start in the fourth quarter.
There’s no word on price or equipment, but we think it will start in the mid-$30,000 range and could pack a smaller battery and more basic interior materials.
Tesla has been toying with the idea of a more affordable, entry-level model for years. In April, Tesla said it would start production of such a vehicle in June, but we still weren’t sure what to expect from this less expensive Tesla. Now, in the company’s 2025 second-quarter earnings call, it confirmed that production has begun, with CEO Elon Musk providing a clearer picture of what form this new model will take.
“It’s just a Model Y,” Musk said, confirming an earlier report. While Tesla had been reportedly developing an entirely separate entry-level car, potentially named Model 2, a report in April 2024 from Reuters claimed that the project had been canceled. But rumors persisted of a more affordable Tesla, with hints that it might not be a separate model and instead just slot in as a stripped-down version of an existing Tesla. Now we know for certain that this entry-level Tesla will just be a more basic Model Y, which is Tesla’s bestseller and currently starts at $46,630.
2025 tesla model y juniper
Tesla
In its Q2 earnings release, Tesla stated “initial production” began in June, with “volume production” set to ramp up in the second half of the year. Tesla vice president of engineering Lars Moravy cautioned on the call that production won’t truly get underway in meaningful numbers until the end of 2025, and he said this new Model Y variant would become “available for everyone” starting in the fourth quarter.
There’s no word yet on what this less expensive Model Y will cost. The long-running rumors around a potential “Model 2” pegged that model at a $25,000 base price, but we think it would be a serious challenge for Tesla to drop the Model Y’s price below $30,000, especially with how bare the SUV’s interior already is.
Previous reports suggested that this model would cost 20 percent less to build than the current Model Y, and we think pricing could fall in the mid-$30,000 range. Along with cheaper interior materials, we wouldn’t be shocked to see a smaller battery or a less powerful electric motor. More details should trickle out in the coming months.
Associate News Editor
Caleb Miller began blogging about cars at 13 years old, and he realized his dream of writing for a car magazine after graduating from Carnegie Mellon University and joining the Car and Driver team. He loves quirky and obscure autos, aiming to one day own something bizarre like a Nissan S-Cargo, and is an avid motorsports fan.
