Tesla provides a smaller model y is 20% cheaper to produce

Interior sources say that the new EV will be strongly based on the juniper of the Y model

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Not so long ago, Tesla appreciated the almost total domination on the market for rapidly growing electric vehicles in China. But with local competitors like Byd quickly switching to world importance, the American brand is now found in a race against increasingly formidable rivals, which regularly erode its market share. In response, Tesla would work on a more affordable version of the current Y model.

Last year, Tesla set a new record by selling more than 657,000 vehicles in China. However, sales stagnated at the beginning of 2025, and a cheaper model could be exactly what the company needs to resume momentum. According to reports, this new version will be based on the “juniper” iteration of the Y model, although certain details remain vague.

Read: Tesla confirms the new “affordable models” with new generation technology for the first half

Chinese 36kr site suggests that this new EV is developed thanks to a process of “spending” -, therefore, a rationalized approach aimed at quickly launching new models with a minimum of modifications. In the meantime, Reuters Cites three families familiar with the question that spoke under the guise of anonymity, because the project is still confidential. According to them, the vehicle is developed under the code name of the “E41” project and will be built on the existing production lines, with mass production which should start in 2026.

Basic model y or smaller model y?

China’s reports indicate that the basic model will be a simpler version, similar to the 3 Tesla budgetary model launched in Mexico last year – stimulation of features such as vegan leather for fabric seats, removing the second row touch screen and omitting ambient lighting for a discount of $ 4,000.

However, the sources of Reuters indicate that this new EV based on the model will actually be smaller and will cost at least 20% less to produce compared to the refreshing version of the crossing, which starts at 263,500 yuan (about $ 36,500 at current exchange rates) in China.

This model is cheaper and reduced can be One of the “more affordable” models, Tesla said that he was developing in January. At the time, he said that these new models will use aspects of its new generation and current platforms.

Made in China, Europe and the United States

According to the same interior sources, the cheaper and smaller EV based on a model will be mainly targeted for the Chinese market to help Tesla maintain its market share. However, the car will also be produced for Europe and North America, although there is no clear calendar for the moment it reaches these markets.

Despite the competition, the Y 2025 model seems to be doing well in China. Local reports suggest that Tesla has already received more than 200,000 pre -orders for the electric SUV, and deliveries have already started.