Tesla had earlier said it planned to launch a cheaper, bare-bones version of its top-selling Model Y in the first half of next year. But it is no longer an idea of hoping to start production this year or the next—instead, the earliest projection is Q3 of the current year, and it may stretch to 2026.
Also known as ‘E41’, the new Model Y variant is imperative for Tesla’s overall plan of aiming to launch more affordable EVs as sales decline and competitors grow. The company expects to manufacture approximately 250,000 affordable Model Ys in the United States the same year. It is also expected that production will be extended to more trims in Tesla’s manufacturing plants in China and Europe.
For instance, Tesla recently tested a Model Y that was well-covered; speculations emerged that a new performance or super-range Model Y or an affordable model could be in the pipeline. The exterior of the prototype also looked like a normal version but had slightly bigger wheels that suggest improved speed or battery life. As Tesla hasn’t commented on the platform, the spotting indicates that they are at least toying with the idea of using the Model Y platform with the E41, which is expected shortly. This may be seen as a part of a strategy to diversify its product portfolio in an increasingly competitive global EV market.
A Shift in Strategy
The delay comes at a bad time in the lifecycle of the Tesla company, which is in great need of new models to accelerate the company’s growth. The company has been pressured to develop the newest models and those that are relatively cheaper as competition thickens and sales slow down. Market share loss, the fact that the car models that Tesla builds are relatively old, and the controversy surrounding the political endorsement by Tesla’s CEO, Elon Musk.
Musk has often mentioned the arrival of new inexpensive EVs and has set his eyes on the $25,000 model developed on a new platform. But that project has been said to have been sidelined in order to allow Tesla to focus on robotaxis. In the meantime, the hope of success from models such as the E41 is expected to help the company continue its marketing efforts for affordable vehicles and renew its product offerings.
🚨 Tesla to delay US launch of affordable EV, a lower-cost Model Y, sources say
Global production of the lower-cost Model Y, internally codenamed E41, is expected to begin in the United States, the sources said. That would occur at least a few months later than outlined in… pic.twitter.com/GtDpF3cymv
— Herbert Ong (@herbertong) April 18, 2025
Tesla has recently updated the existing Model Y production with the latest interior and exterior features. The Long Range All-Wheel Drive model is offered for about $49,000 before the federal tax credit, which can benefit you in the amount of $7,500. The E41 version will cost less than the current model and may be approximately 20% cheaper to manufacture, sources privy to Tesla’s China strategy have said.
Tesla Launches More Affordable Model Y Juniper Trim in the US
Global Expansion Plans
However, as already mentioned above, the production in the US is expected to start only in 2026, and Tesla seems to be quite determined to internationalize its more affordable models. The E41 is to be launched in China as well, which will also be in 2026. It is still rather ambiguous about the timing of Europe’s delivery.
Another development that the company allegedly discussed was to bring a standard-range version of the Model 3 sedan, which will be significantly cheaper. These efforts demonstrate the fact that Tesla is trying to tackle new segments so as to not only protect its market share but also evict the hordes of traditional automakers and new startups that are increasingly vying for dominance in the emerging EV market.
