If you’ve been car shopping for a dirt-cheap Tesla, don’t expect it to be a new entry-level Model Y. A new report says production of Tesla’s much-touted plan for “more affordable models” has been pushed back by several months.
The Tesla Model Y, the best-selling car in the world in 2023 and 2024, was finally significantly refreshed for 2025. Dubbed “Juniper,” the update included exterior design tweaks, more tech, and improved performance. However, the Long Range All-Wheel Drive model (the only one currently available) also starts at $50,630 before any applicable EV credits. But, hey, weren’t we supposed to have a $25,000 Tesla by now?
According to Reuters, the planned lower-cost Model Y was supposed to begin production during the first half of this year. However, as with all things Tesla, plans and promises are written in sand, constantly changing with the tides. Now, the start of U.S. production for the cheap Model Y (internally known as E41) is slated to begin between the third quarter of 2025 and early 2026.
Even though the calendar is fluid, people familiar with the project told Reuters that the automaker has a target to produce 250,000 units of the E41 Model Y in 2026. That would be U.S.-built vehicles, specifically. In 2024, Tesla produced nearly 1.68 million Model 3 and Model Y vehicles.
The final price is, for now, as mysterious as production timing. The idea of a $25,000 Tesla has been discussed, reneged, and rumored back into existence. For what it’s worth, a 25-grand Tesla could have been purchased from Hertz, with prices for those falling as low as $14,000.
If the E41 is indeed smaller and costs 20% less to build than the regular Model Y Juniper, as Reuters reports, then perhaps a Model Y at current Model 3 prices is more realistic than not. Sources told Reuters that a “bare-bones” variant of the Model 3 is also in development. That’d probably be the best bet for a bargain-priced Tesla EV that isn’t part of a rental agency fire sale.
The E41 Model Y will also be launched in China and Europe. The timing of the European rollout hasn’t been announced yet, but it is said to be 2026 for the Chinese market. Continued automotive tariffs could affect the timeline, though. For example, shipments of China-sourced components for the Cybercab and Semi were recently suspended.
Of course, Tesla investors are hoping the less expensive models start production sooner rather than later. And maybe, just maybe, a budget-friendly EV with high-priced tech and performance is enough to reverse lagging sales. Or maybe this is all still wishful thinking.