Tesla’s highly anticipated lower-cost Model Y has been spotted out in the wild for the first time, confirming that real-world validation testing is currently underway. The sighting of the prototype was captured by @RyanMable on X, who snapped images of the vehicle driving near Gigafactory Texas. This new variant of the Model Y features a more simplified exterior design compared to the current lineup, with individual headlights replacing the front light bar.
This is the first time that the new Model Y has been seen without any camouflage on public roads, indicating that Tesla is getting closer to a potential launch. Real-world validation testing typically occurs in the final stages before production begins. Just earlier this week, a camouflaged prototype was spotted on the streets of California, suggesting that Tesla is also testing the vehicle at its Fremont factory. However, with this recent sighting in Texas, it seems that Tesla is gearing up to produce the new model at Giga Texas as well.
Recent references found in Tesla’s website backend suggest that the new variant, internally known as “E41,” may be marketed as the “Model Y Standard” with a starting price of $39,990. While these details could still be subject to change, this new trim level would make Tesla’s popular electric vehicle more accessible to a wider range of consumers.
Leaked specifications indicate that the Model Y Standard will come with a refreshed front fascia, single-piece headlights, a front bumper camera, and a “closed glass roof” instead of the panoramic glass roof. The interior will feature a more simplified design with textile décor, a manually adjustable steering wheel, and second-row manual air vents. While some premium features like the HEPA filter and second-row touchscreen have been removed, the central 15.4-inch display remains intact. Cargo capacity is slightly reduced compared to the Long Range version, coming in at 75 cu. ft.
During Tesla’s Q2 2025 earnings call, CEO Elon Musk confirmed that production of the cheaper Model Y had already technically begun, with a full ramp-up scheduled for the fourth quarter of the year. With sightings in both California and Texas, it seems that Tesla is on track to meet this timeline.
What are your thoughts on Tesla’s new, lower-cost Model Y? Do you believe that Tesla is gearing up for a Q4 launch in the United States? Share your opinions in the comments below.