Tesla’s highly anticipated and rumored affordable electric vehicle, the lower-cost version of the Model Y codenamed “E41,” may be facing delays, according to an exclusive report by Reuters. Initially expected to begin production in the first half of 2025, sources now suggest that the timeline has been quietly pushed back, with production likely to start between the third quarter of 2025 and early 2026. The exact reason for the delay remains unclear at this time.
Internally, Tesla has set a production target of around 250,000 of these cheaper Model Ys in the U.S. for 2026, with plans for additional production in China and Europe. In China, production is slated to begin in 2026, with costs expected to be 20% lower than the current refreshed Model Y.
The upcoming vehicle is expected to be smaller and more stripped-down compared to existing models, with a starting price of around $49,000 in the U.S. before tax credits. Tesla is also reportedly working on a basic version of its Model 3 sedan.
Although CEO Elon Musk previously hinted at a $25,000 EV platform, the company shifted its focus to the robotaxi project instead. As trade tensions escalate, Tesla has increased its sourcing of parts from North America to avoid import tariffs, which could potentially benefit the rollout of the E41.
Investors are eagerly awaiting Tesla’s quarterly results, scheduled to be reported on Tuesday, for any updates on future vehicles and production plans. It is worth noting that Musk has previously refuted reports by Reuters as false, but has not yet commented on this latest report. Last year, Musk dismissed a report by Reuters claiming that Tesla had abandoned plans for a low-cost car.
In recent news, Tesla introduced a new version of the Model Y earlier this month, priced lower than the initial Launch Edition. The new Long Range AWD model starts at $48,990 USD, offering a more affordable option for consumers.
As the electric vehicle market continues to evolve, Tesla’s upcoming affordable Model Y variant remains a highly anticipated release, despite the reported delays. Stay tuned for more updates on Tesla’s production plans and future vehicle releases.