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Elon Musk has been promising robotaxis since at least 2016. Back then, the idea sounded like a bit like science fiction, and Musk’s timeline was — as ever — aggressively optimistic. Nearly a decade later, fiction is expected to finally become fact: On June 12, Tesla (TSLA) is expected to show off its first real…
Tesla has reiterated its plan to begin production of a more affordable electric vehicle in the first half of 2025, maintaining the timeline despite conflicting reports and ongoing industry skepticism. During the company’s latest earnings call, executives confirmed that production preparations are complete and the launch remains scheduled for June.
This comes days after Reuters reported, citing unnamed sources, that Tesla’s lower-cost EV—internally codenamed “E41”—had been delayed, potentially pushing the timeline to late 2025 or early 2026. According to that report, Tesla’s goal to assemble up to a quarter million units of the new model was being reassessed, with shifting internal targets and no clear revised launch date.
In the earnings call, Tesla’s VP of Vehicle Engineering, Lars Moravy, pushed back on that narrative, emphasizing that the company is ready to start building the vehicle on existing assembly lines. “The models that come out in the next months will resemble in form and shape the cars that we currently make,” said Moravy. “The key is that they’ll be affordable and you’ll be able to buy one.” CFO Vaibhav Taneja also confirmed the June production target, stating that necessary upgrades to accommodate the new models were completed alongside recent changes to the Model Y lines.
As Digital Trends outlined in its recent coverage, the affordable model—likely a pared-down version of the Model Y—is expected to come with a smaller footprint and lower price tag, potentially under $40,000 before incentives. Tesla is reportedly leveraging increased local sourcing of parts to help shield the model from potential tariffs and trade volatility.
Still, Tesla faces mounting pressure. The automaker’s Q1 2025 earnings revealed a sharp 71% drop in income, and global sales have been on a downward trend. In California, Tesla’s market share fell below 50% for the first time this year. Analysts and market watchers continue to point to CEO Elon Musk’s polarizing political activity as a factor dampening consumer sentiment.
For Tesla, the affordable EV is more than a product launch—it’s a test of whether the company can reestablish momentum in a market that’s rapidly evolving without it.
It’s been a while since Tesla gave a long-awaited makeover to its Model 3 EV, and followed it with the introduction of an updated Model Y in its home market. However, the company’s rumored plans for a more affordable SUV that will be assembled in the US have reportedly run into a delay.
According to Reuters, Tesla was hoping to assemble nearly a quarter million units of its cheaper Model Y variant in 2026. The goalpost has now been shifted, and there is no clarity regarding a revised market launch plans for the vehicle, which is said to be in development under the codename E41. .
“Global production of the lower-cost Model Y, internally codenamed E41, is expected to begin in the United States, the sources said. That would occur at least a few months later than outlined in Tesla’s public plan, they added, offering a range of revised targets from the third quarter to early next year,” says the report.
The watered-down Model Y variant will reportedly have a smaller footprint and is touted to sell at a 20% lower sticker price. For comparison, the Long Range All-Wheel Drive (AWD) trim of the Model Y currently goes for $41,490 in the US, after applying the federal tax credit worth $7,500 in the US.
Based on the report, the upcoming car could be priced a hair under the $40,000 mark before tax credits are put into the mix. With an asking price like that, Tesla would would put itself in direct competition with the likes of Hyundia, Kia, Chevrolet, Toyota, Volkswagen, and Ford.
Notably, Tesla is said to have ramped up local sourcing of parts in the past few quarters, which means if the company moves ahead with plans of mass manufacturing the Model Y “E41” variant, the impact of tariff won’t be felt as much. However, the situation remains volatile as Tesla has seen a sharp decline recently.
The company’s market share slid below 50% for 2025’s first quarter in California, one of the biggest EV markets in the country. “An aging product lineup and backlash against Elon Musk’s political initiatives are likely key factors for the decline in Tesla BEV market share,” the California New Car Dealers Association said about the slump.
In addition to a stripped down Model Y, the carmarker is currently occupied with its Cyber Cab project. Interestingly, the Reuters report mentions that Tesla is also working on “a bare-bones version of its Model 3.” The company was recently said to be working on an affordable EV that could cost as little as $25,000, but those plans have been shelved, for now.
