Tesla’s plans for an affordable electric vehicle—a stripped-down version of its best-selling Model Y SUV—have encountered delays, according to Reuters.
Originally slated for production in the first half of 2025, the launch has now been postponed to the third quarter of 2025 or early 2026, according to sources familiar with the matter.
Tesla has pledged to launch more affordable vehicles starting in the first half of the year, aiming to revive declining sales.
One key model in this strategy is a lower-cost version of the Model Y, codenamed E41.
According to sources, global production of the E41 is expected to begin in the U.S., but this may happen several months later than Tesla’s public timeline.
While the company initially indicated a launch in the first half of the year, internal projections now suggest a revised timeline ranging from Q3 2025 to early 2026.
Tesla is developing a lower-cost version of its Model Y, codenamed “E41,” with plans for production in the United States, China, and Europe.
The U.S. launch has been delayed, with production now expected to commence in the third quarter of 2025 or early 2026.
Tesla aims to produce 250,000 units of this affordable Model Y in the U.S. by 2026.
Tesla is set to report its latest financial results on Tuesday, with a primary focus on the anticipated launch of its new mass-market electric vehicles. These models are seen as pivotal for reversing declining sales and regaining market share.
Tesla has updated its original Model Y with new exterior and interior features. The Long Range All-Wheel Drive version is priced at about $49,630 in the U.S., before a $7,500 federal tax credit, which brings the effective cost to around $42,130.
Reuters reported that Tesla plans to launch a more affordable version of its Model Y, codenamed “E41,” in China. This new model is expected to be smaller and cost at least 20% less to produce than the refreshed Model Y, which retails for approximately 263,500 yuan ($36,351) in China.
Tesla is reportedly planning to introduce a more affordable version of its Model 3 compact sedan, aiming to broaden its customer base amid increasing competition and declining sales.
According to sources, this upcoming variant will be a stripped-down model built on Tesla’s existing platform, enabling quicker production and cost savings .
The company has not provided specific details regarding the features, pricing, or launch timeline for this budget-friendly Model 3.
