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Tesla has reportedly delayed plans for a budget-friendly version of the Model Y.
Sources who spoke to Reuters didn't specify how long EV shoppers may have to wait for a more affordable Tesla, but it's "at least months later than Tesla's public plan." Regardless, Tesla still intends to manufacture 250,000 units of the new Model Y (codename E41) in the US by 2026, with plans to begin production in China and Europe at a later date.
A “bare-bones version” of the Model 3 is also planned, according to Reuters, which didn't provide details on just how much cheaper the cars will be. The current Model Y and Model 3 start at $50,630 and $44,130, respectively, before applying things like tax credits.
Tesla has flirted with the idea of rolling out lower-cost EVs. In April 2024, Reuters reported that the carmaker has scrapped plans for a $25,000 EV to focus on its robotaxi operations. At the time, CEO Elon Musk denied it and accused the news organization of lying. By November, however, he basically confirmed the story in an earnings call by saying the introduction of a $25,000 Tesla is “pointless” because “the future is autonomous."
Still, Tesla is dealing with lackluster sales in the US and abroad. It reported its first yearly sales decline in well over a decade in the first quarter of 2025, though it was only a 1% drop. The EV maker delivered 336,681 vehicles in Q1, down 13% from Q1 2024 and over 20% from Q1 2023. It's also facing hefty tariffs.
US sales were comparatively strong compared to Europe. Sales in Germany have reportedly dropped 62%, amid Musk pledging support to the right-wing German party AfD in the run-up to their recent election.
In the US, Musk's work with Trump and DOGE has led to vandalism. Rival EV makers like Lucid and Polestar have been quick to offer Tesla drivers discounts for trading in their Teslas.