The heavily-teased, “more affordable” Tesla model is finally coming soon, as confirmed by head honcho Elon Musk during the company’s Q2 2025 earnings call. But while it might be cheaper, it won’t be coming as a brand-new model, as was previously rumoured.
As reported by Jalopnik, CEO Musk told analysts the supposedly entry-level Tesla is “just a Model Y”, probably with a bunch of stuff stripped out. Tesla says that the “cheaper” Model Y has already begun production in June (although full capacity will only be reached later this year), and is slated to go on sale in Q4 this year – Tesla time, of course. Anyone remember the Roadster?
This, of course, is not the first time Tesla has toyed around with the idea of an affordable model, rumoured to be called “Model 2”. That car, however, has been reportedly cancelled, in favour of the Robotaxi/Cybercab that Musk has been pushing for years. The latter finally launched in small scale operations – for invitees only – in Texas last month.
So, why is Tesla suddenly bringing up the affordable model again? Perhaps – and we’re just spitballing here – it’s due to heavily slumping sales, which saw the company’s earnings drop by 16% – the largest quarterly drop for Tesla in a decade, and a drop for the second quarter straight.
RELATED: Six-seater Tesla Model Y L teased, to launch soon in China
With the Robotaxi enterprise likely not returning a profit anytime soon, a more affordable model could help Tesla alleviate some of its current woes.
The Q4 timeline would also coincide with the end of the US Federal EV Tax Credit on 30 September 2025, courtesy of the Big Beautiful Bill that former-best-friend Donald Trump pushed for, that would in practice raise Tesla’s prices in the US up by USD7,500 (approx. RM32k), and drop demand for their cars even further.
We don’t know yet how much this “more affordable” model is going to cost, although Musk has previously stated that it’ll cost under USD30,000, with tax credit rebates. Considering that the cheapest Model 3 in the States costs USD42,490 (approx. RM179k) before the tax credit, the introduction of the affordable model could make Tesla ownership accessible to a much wider customer base.
As Elon Musk said in the earnings call, “The desire to buy the car is very high. Just people don’t have enough money in their bank account to buy it. Literally, that is the issue. Not a lack of desire, but a lack of ability. So the more affordable we can make the car, the better.”
So what would Tesla strip out from the Model Y to make it more affordable? Think replacing the standard leather upholstery with a more basic cloth upholstery, removing the rear passenger display on the centre console, and forgoing features like ambient lighting and ventilated seats – as seen on the cheaper Tesla Model 3 model that was introduced in Mexico last year.
But would a cheaper model really bring customers back to Tesla? Or are buyers still turned off by the idea of owning an Elon Musk car, given his political involvement these days? Only time would tell.
ALSO READ: Tesla updates Model 3 and Model Y in China with longer range as headwinds continue
