Tesla’s sales figures continue to plunge further as the company confirmed it will manufacture more affordable electric vehicles. At the Q2 2025 financial results, the company told the investors it has started “first builds of a more affordable model in June”. The Elon Musk-led EV manufacturer has been struggling to keep up with the Chinese competition and a low demand for its current affordable vehicles, the Model 3 and Model Y.
Tesla switches its strategy
Tesla said that the company has started work on a more affordable model, which will be slotted below the Model 3 and Model Y. The company revealed that the new EV’s mass production is slated for the second half of 2025. Tesla added that “the initial production” will take place in its “1H2025” timeline.
The initial plan of the company was to build a new platform for the affordable EV, but now it will use the Model 3 and Model Y architecture. It is expected to be a stripped-down version with fewer features and budget-based materials. In terms of size, the new EV is going to be slightly smaller than the Model Y.
The new EV has been doing test rounds, and the fully clad, camouflaged vehicle has been spotted near Tesla’s manufacturing plant in California.
Third time is a charm
This is not the first time Tesla has announced that it will enter the affordable segment. According to Electrek, the company has twice worked on this project, which was later scrapped by Musk. It was popularly called “the $25,000 Tesla” and internally called NV91 and NV92. Tesla was working on a new platform, but Musk rejected it as the Model 3 and Model Y production lines were not operating at full capacity due to the slowdown in demand. Hence, Tesla shelved the project, which will, later on, be used as Cybercab.
Musk is confident that Tesla will bounce back in the European market, as he expects to receive the go-ahead for its self-driving autonomous technology.
