During Tesla’s Q2 2025 investor call, CEO Elon Musk revealed that the lower cost model the company is expected to sell is “just a Model Y.” No further details were provided but it is believed the Model Y will get a new base variant with less features to bring the price down, similar to what was done in Mexico for the Model 3. Prior reports suggest a “smaller” body, but Musk’s reply seems to indicate otherwise.
The new base variant of the Model 3 in Mexico come with the Rear-Wheel Drive powertrain, but loses out on things like leather seats (fabric only), a rear touchscreen, acoustic glass, adjustable ambient lighting (just one colour), seat ventilation and heating as well as a heated steering wheel.
Spyshots of such a Model Y have already been posted on social media sites in China, with the “stripped-down” offering said to not come with split headlamps, a glass roof and reflective body panel for the full-width taillights that provides an “afterburner effect.” As for the interior, there is no cupholder cover, no storage in front of the cupholders, no rear touchscreen and no ventilation function for the seats.
“The desire to buy the car (Model Y) is very high. Its 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,” Musk said in response to a question from an analyst on the matter.
LEAKED: $TSLA new affordable Model Y
• Exterior •
🔹 Front bumper camera
🔹 No split headlights
🔹 No glass roof
🔹 No rear indirect light bar
🔹 Afterburner reflection panel replaced by painted body panel• Interior •
🔸 No cupholder cover
🔸 No storage in front of… pic.twitter.com/1A9IXXukHg— Luca Presti (@LVCAPRESTI) July 26, 2025
In a shareholder statement, Tesla said it started building the new “budget” model last month, with volume production scheduled for later this year. “We continue to expand our vehicle offering, including first builds of a more affordable model in June, with volume production planned for the second half of 2025,” the statement read.
Musk also touched upon the company’s Robotaxi service, which he says can help with vehicle affordability. In line with the purpose-built Cybercab, Musk envisions a world where owners can rent out their cars to earn them money when they are not using it.
“It will be a very big deal when people can release their car to the (Robotaxi) fleet and have it earn money for them. I think I feel confident in saying that’ll happen next year in the US at least. That’ll make the affordability dramatically greater. Just like, you know, if you have an Airbnb and you can rent your home when you’re not there or rent out a guest room or guest house or something like that, the affordability of your home is much greater,” he explained.
The need to promote sales with a cheaper offering is important as Tesla faces declining sales due to increased competition as well as revised government incentives, at least in its home market of the United States. Total revenue decreased 12% year-on-year (YoY) in Q2 2025 to USD22.5 billion (about RM95 billion), while total vehicle deliveries dropped by 13% YoY.
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I am thinking a tin kosong Model Y could priced and compete with Xpeng Mona M03?
Teslas are already so barebones from the beginning. How to strip off sommore? I can only see a downtrend for Tesla’s future with an uphill battle for EVs.
This is like iPhone SE
or Taxi Grade.