The promised 'more affordable' model from Tesla may just be a slightly-smaller version of the Model Y SUV with fewer luxuries.
Tesla is working on a cheaper, shrunken version of the Model Y planned to cost 20 per cent less to produce, a new overseas report claims.
If accurate, it appears the first of Tesla's "more affordable" vehicles will just be a revised Model Y, rather than a bespoke vehicle closer in size to a smaller MG 4 or BYD Atto 3.
Citing three internal sources with "knowledge of the matter," news agency Reuters reports a lower-cost Model Y is planned for production in China next year, under the codename E41.
The publication claims the new model will be "smaller" and "cost at least 20 per cent less to produce" than the updated, regular-sized Model Y, which in showrooms is priced from 263,500 Chinese yuan ($AU57,500), or $63,400 before on-road costs in Australia.
If the 20 per cent saving applies to all parts of the vehicle – including Tesla's profit margins – the cheaper Model Y could be priced from, or less than $50,000 before on-road costs.
It will reportedly be built in China, Europe and North America, though production in Shanghai will focus on the local Chinese market, where Tesla is increasingly under threat from domestic brands such as BYD.
Production in the US may come online sooner, as Tesla has confirmed it intends to commence production of the first of its "more affordable" models in the first half of 2025.
Chinese website 36kr first reported on the vehicle – citing its own sources – quoting a launch as soon as the second half of 2025, if the response to the latest Model Y is not as strong as desired.
The website suggests the cut-down Model Y is similar in concept to a more affordable Model 3 launched in Mexico last year, which traded some features – such as heated seats and the rear entertainment screen – for a price saving of about $AU6000.
Unchanged in the Model 3 were the electric motor and battery, which 36kr suggests will also be the case in the stripped-back Model Y.
It is unclear how much "smaller" the new Model Y derivative will be, as suggested by Reuters, and if there will be bodywork shared between the two.
The minimal information published by Tesla to date – and lack of spy photos – suggests there may not be a significant number of bodywork or structure changes.
It says the cheaper model will be built on existing production lines, in line with confirmation from Tesla.
"Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025," the US car giant said in its most recent investor report.
"These vehicles will utilise aspects of the next generation platform as well as aspects of our current platforms and will be produced on the same
manufacturing lines as our current vehicle line-up."
It was long thought Tesla's autonomous Cybercab would spawn a regular version with a steering wheel and pedals, but plans for such a vehicle were reportedly called off last year.
The US car giant has instead turned its focus to more conventional new vehicles that share more with existing models.
Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
