Tesla's Upcoming Budget Vehicle May Be a Model Y That is Purely Y and Lacks Model Features | Carscoops

      The silence signifies the disappointment of numerous Tesla enthusiasts who were anticipating something innovative.

      Elon Musk has stated that we can look forward to a Model Y variant as part of the company’s new 'affordable car.'

      While some fans are let down, others are expressing worries about Tesla’s approach to business.

      If launched this year, the new model could present a highly appealing product option.

      Musk may have inadvertently revealed some information during Tesla’s Q2 earnings call when he referenced the Model Y. Upon inquiry about the next vehicle, his reply led many to speculate that it might essentially be a simplified version of the Model Y. Regardless of whether this speculation holds true, there are indications that the timing might actually benefit Tesla.

      Tesla experienced a particularly challenging first half of the year, recording its largest quarterly revenue drop (12%) in over a decade, even with the updated Model Y, the brand's top-selling car. Consequently, the stock has fallen by over $30 at the time of this writing.

      The company has expressed optimism about the future, including a new 'affordable model' expected to enter volume production later this year, with reports that it is already being built in limited quantities. At the end of the previous earnings call, there were queries about the appearance of the new model.

      In hints regarding the next model, Elon Musk interrupted another executive who was slow to respond, saying either “It looks like a Model Y,” or “It’s just a Model Y.” The audio quality from the video isn’t clear enough to confirm this, but it provides enough insight for further conclusions. For instance, one should not anticipate an extreme or avant-garde design akin to a miniature Cybertruck.

      Whatever the outcome, it’s probable that the model will resemble, if not be, a Model Y with a significant reduction in features. Tesla could downsize battery capacity, eliminate components like the rear-seat display, decrease the number of cameras, and scale back on sound insulation materials. There may also be alterations in battery chemistry or motor changes to reduce production costs. Utilizing existing Model Y manufacturing tools would likely assist in controlling expenses as well.

      However, not everyone is excited about the potential of a less-featured Model Y. Some critics see it as underwhelming for a new model. Others are anxious it could pose a significant challenge for Tesla as a company. “Model S, Model X, and CT are all struggling, Model 3 sales have suffered due to the Model Y's success, and now the Model Y lite might undercut Model Y sales with lower margins.”

      Could the Timing Be Right?

      This might be true or not, but the brand's supporters still have reasons to remain hopeful. Tesla might still emerge positively from this situation. Whether the upcoming affordable vehicle resembles the current Model Y or is a scaled-down variant, it appears to be arriving at an opportune moment. Federal tax credits are set to expire, at least for the next few years.

      This change will likely complicate electric vehicle sales for nearly all brands. If Tesla can introduce this new 'affordable model' right as competitors start selling their vehicles without the tax incentive, it could assist Tesla in recovering from its current predicament.

      However, that would be quite disappointing. If it’s merely another trim… why not have released it earlier? It doesn’t add up. A less expensive Model Y that’s just a few thousand dollars cheaper won't significantly impact sales. We need a CyberCab equipped with pedals and a steering wheel.

      — Ramy (@TeslaXplored) July 24, 2025