Tesla’s long-awaited low-cost model has finally been confirmed. During its second-quarter 2025 earnings call, CEO Elon Musk revealed that the upcoming affordable variant is a stripped-down version of the popular Model Y SUV.
The new car will feature a single motor and cloth seats, similar to the entry-level single-motor Model 3 sedan. It’s expected to have a smaller battery, downgraded infotainment system, and no features like heated rear seats or HEPA cabin filters.
Musk cited the Model Y as the most desirable vehicle in Tesla’s lineup, making it an ideal basis for the low-cost variant. Production of the affordable Model Y has been underway since June, with an expected on-sale date in the third quarter of 2025.
The affordable Model Y is just one aspect of Tesla’s plans to expand its robotaxi service and improve its financials. The company aims to reduce costs per mile for its robotaxi service once the Cybercab is released, while also expanding its operating areas to Austin, Texas, and San Francisco.
However, Tesla’s recent quarter has seen declining revenues and a significant drop in income from all operations, year-over-year. Musk acknowledged this trend and expressed concerns about potential activist shareholder pressure, including the possibility of being ousted as CEO.
With the revocation of federal EV tax credits and tariffs impacting materials costs, Tesla faces several challenges to its financial stability. Despite these pressures, Musk remains confident that autonomous vehicle deliveries will expand, with Bay Area driverless deliveries starting by the end of 2025.
Source: https://www.motortrend.com/news/cheap-tesla-model-y-coming-2025