Tesla’s ‘More Affordable’ Model Is Now In Production

By Gary Gastelu |

Jul 23, 2025

Tesla has a new model in production, but you can’t see it yet.

Elon Musk confirmed during the automaker’s second-quarter earnings call that what’s being billed as a “more affordable” Tesla is now in pilot production.

Official images and details have not yet been released, but camouflaged prototypes that have been spotted being tested suggest it is closely based on the Model Y and Musk said during the call that “It’s just a Model Y.”

Musk and other Tesla officials said that production would ramp up through the third quarter and reach high volumes by the end of the year, but didn’t confirm when it would be revealed or when deliveries would begin.

Tesla’s least expensive vehicle in the U.S. today is the $42,490 Model 3, which currently qualifies for a federal tax credit that gets that down to $34,490, but the incentive program is ending on Sept. 30th. Last year, Musk said the entry level model would cost less than $30,000, but only when the incentive was included, so the price point could be as high as $37,499.

Tesla launched a cut-price version of the Model 3 in Mexico in 2024 with cloth upholstery that skips the heated seats, rear cabin vents, several acoustic glass panes and drops a couple of speakers and a few other features to reduce its price, but it’s still a Model 3.

Tesla also said that the two-seat Cybercab, which has no steering wheel and will be deployed in its ride-hailing Robotaxi fleet, is still on track to enter low volume production late this year before things crank up in 2026. The Cybercab is an all-new vehicle that Tesla says uses a unique low-cost manufacturing process.

The Robotaxi service currently operates in a small section of Austin, Texas, but Tesla plans to expand to other cities soon and Musk said he believes it could cover areas that encompass half the population of the U.S. if regulations allow. Only a handful of U.S. cities including Austin, San Francisco and Phoenix currently have fully autonomous taxi services in operation.

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Musk also said that the unsupervised Full Self-Driving technology that enables the Robotaxi to work without a human driver monitoring its operation could be unlocked in customer cars before the end of 2025.

This story has been updated with additional information