Tesla's long-awaited low-cost model will likely be a heavily simplified version of the Model Y
During the presentation of Tesla's Q2 2025 report, Elon Musk hinted at the nature of the company's next new product. When asked about the expected "affordable model", he said something like: "It looks like a Model Y" or even "It's just a Model Y" - the exact wording is difficult to make out due to poor sound quality. However, the hint was clear enough: the new model may turn out to be nothing but a simplified version of the Model Y.
Here's What We Know
Such a move may play into Tesla's hands. The first quarter of 2025 was one of the most difficult for the company: revenue fell by 12%, the biggest drop in more than a decade. Even the revamped Model Y, the brand's most popular car, didn't help avoid the slump. Tesla shares fell more than $30 on the back of the report.
At the same time, the company continues to assure that the future looks promising. One of the hopes is just this "affordable model," which is already allegedly being produced in small quantities and should go into mass production by the end of the year.
If Musk really meant the Model Y, we're probably talking about a simplified version of the current crossover. In such a car, Tesla could reduce battery capacity, remove the rear screen, reduce the number of cameras, simplify noise insulation, use a different battery chemistry or cheaper motors. Using the Model Y's existing production lines will also reduce production costs.
Even if the new product turns out to be essentially the same Model Y but cheaper, it could come out just in time. In the U.S., federal subsidies for buying electric cars will soon expire, and other brands will have to sell their cars without government support. And that could give Tesla an advantage - if the company can offer a low-cost electric car at the right time.
Source: Carscoops
