New Affordable Tesla Model Y to Compete with Chinese Electric Vehicle Rivals

Tesla’s long-anticipated more affordable model has been confirmed by CEO Elon Musk, and it will be a cheaper version of the hugely popular Model Y SUV.

During a Q2 investor conference, Musk responded to a question about the upcoming new model, stating, “it’s just a Model Y.” Earlier this year, Lars Moravy, Tesla’s Vice President of Engineering, hinted at the design, saying, “the models that come out in the next months will resemble in form and shape the cars that we currently make.”

On the call, Musk explained the rationale behind introducing a lower-cost Model Y. “The desire to buy the car is very high. Just people don't have enough money in their bank account to buy it. Literally, that is the issue. Not a lack of desire, but a lack of ability. So the more affordable we can make the car, the better.”

In the UK, the starting price for the Model Y is currently £44,990, while the Model 3 begins at £39,990. This suggests the new, cheaper Model Y variant will be priced between these two models. Early indications suggest it could follow the pattern of the budget Model 3 launched in the Mexican market last year, which substitutes vegan leather with cloth upholstery and omits features such as ambient
interior lighting and heated seats and steering wheel.

Production of the new Model Y variant is reportedly already underway, with Tesla confirming “first builds of a more affordable model in June, with volume production planned for the second half of 2025.” While UK deliveries are still some time away, shoppers can find the best prices on new and used Teslas via Auto Express’s marketplace, where you can also sell your current vehicle.

The introduction of a cheaper Model Y aims to help Tesla counter declining sales. Although the Model Y was the world’s best-selling electric vehicle last year, Tesla’s overall deliveries and profits have recently suffered, with revenue down 12 percent, marking the company’s largest drop in a decade.

Additionally, Tesla confirmed that both the autonomous Cybercab, currently in limited operation in Austin, Texas, and the Semi truck will enter volume production next year.