Tesla has confirmed plans to launch its most affordable electric vehicle (EV) yet, with production scheduled to begin in June 2025.
The announcement came during the company's first-quarter earnings call, offering new hope for buyers seeking a lower-cost entry into Tesla ownership.
Production aligned with Model Y updates
According to Tesla's Chief Financial Officer Vaibhav Taneja, preparations for the new model were streamlined alongside the retooling of factories for the refreshed 2025 Model Y.
Tesla said it was able to install tooling for the upcoming affordable EV without disrupting existing production lines.
While specific details remain under wraps, the company hinted that the new model will "resemble in form and shape the cars that we currently make." This strongly suggests the vehicle will be a simplified version of an existing model rather than a clean-sheet design.
A stripped-down Model Y - or more?
Speculation points toward a pared-back Model Y as the frontrunner. Tesla's Vice President of Vehicle Engineering, Lars Moravy, reinforced this idea, stating, "the models that come out in the next months will resemble in form and shape the cars that we currently make."
The use of "models" implies Tesla could introduce both a Model Y and a Model 3-based affordable variant.
Building on existing platforms is key to achieving the aggressive target price, rumoured to be under US$30k (around NZ$50k).
However, Tesla did not clarify whether this figure includes incentives such as EV tax credits.
Strategic timing amid profit pressures
Although production is scheduled to commence in June, Tesla cautioned that the initial ramp-up will be gradual. Deliveries are unlikely to hit significant volume until later in 2025.
The timing of the new entry-level EV is critical. Tesla recently reported a 71% drop in first-quarter profits compared to the previous year, highlighting the urgency of expanding its customer base with more accessible models.
With the Model 3 and Model Y in New Zealand currently starting at $63,900 and $67,900 respectively, the new affordable Tesla could reshape the brand's reach and competitiveness - particularly as more rivals crowd the compact EV segment.