In view of Tesla’s declining market share, insiders say the company is working on an affordable new model based on the Model Y. The vehicle is to be built in China, Europe and North America and is aimed to win back market share.
As is so often the case with Tesla, there has been no confirmation of corresponding media and agency reports to date, but the information is essentially the same. The Chinese portal 36Kr reports that Tesla is planning a ‘cheaper Model Y’ in response to the tough price war for electric cars in China. Compared to the current Model Y, this is not expected to have any significant changes to the battery, drive, chassis and other parts.
Tesla China is developing the new model with the help of ‘Depop,’ an internal process that optimises configurations to enable fast product launches while leaving the most important functions unchanged. The timing of the market launch of the new model depends on the order situation for the revised Model Y. If this does not fulfil expectations, Tesla will probably introduce this more affordable Model Y in the second half of 2025.
A report by Reuters takes a similar line. It states that Tesla wants to produce a cheaper version of its Model Y in Shanghai in order to regain ground in its second-largest market, China. According to insiders, Tesla is developing the model under the codename ‘E41’ and wants to manufacture it using existing production lines.
Mass production of the vehicle is set to begin in Shanghai in 2026, and it should cost at least 20 per cent less than the new Model Y Juniper, according to the Reuters report. In return, the vehicle will be smaller than the Model Y Juniper. The vehicles produced in Shanghai will mainly be sold in China in order to defend market share, said one of the insiders. However, according to the report, the ‘E41’ will also be produced in Europe and North America.
Tesla recently launched a slightly slimmed-down Model 3 for the Mexican market. In this version, which is around €3,600 cheaper, functions such as the screen in the second row and the ambient lighting have been removed, and the artificial leather interior has been replaced by fabric.
Tesla CEO Elon Musk has repeatedly held out the prospect of cheaper models and most recently announced corresponding vehicles for the first half of 2025 – a schedule that is unlikely to be met. During a visit to Giga Berlin in 2023, Musk is said to have announced the production of a compact car for 25,000 euros, which has yet to materialise. In view of the current situation at Tesla, it is more likely that the idea of a slimmed-down Model Y will be realised than that a completely new, affordable compact car will be launched on the market.
36kr.com (in Chinese), reuters.com
