- Tesla planned to launch affordable EVs by June, but with the month drawing to a close, it's unclear what the status of those models is.
- The new EVs are expected to fall in the $30,000 price range. They have several rumored names, including Model 2, Model Q and even Model A. None of those names are confirmed.
- Tesla sales are plunging across the world. The company needs its new lower-cost models to bankroll its AI and robotaxi dreams.
Tesla said during its first-quarter earnings call that the production of its affordable electric vehicle was on track to begin in June. Well, June is almost over, and the budget-friendly Tesla is nowhere to be seen.
In the same earnings report, the company acknowledged that “more affordable options are as critical as ever,” citing economic uncertainty and shifting policy as major hurdles for the EV market’s growth.
What’s less clear is how last Sunday’s robotaxi launch in Austin—and the fallout from it—might be influencing the timeline or strategy for those lower-cost models.
It’s also unclear whether Tesla plans to launch one or multiple low-cost models. Rumored names include the Model 2, Model Q, and Model A, with internal references to a project codenamed E41. These models are expected to start around $30,000, but it’s uncertain if that figure includes the consumer tax credits, which are facing the death sentence in Congress as the Trump administration moves to dismantle Biden-era EV subsidies.
Amid this policy turbulence, Tesla said it had been ramping up production of the refreshed Model Y at its Fremont factory and Gigafactory Texas in Austin, while also preparing those lines for the new, lower-cost EVs.
“The models that come out in the next months will resemble in form and shape the cars that we currently make,” Lars Moravy, Tesla’s vice president of vehicle engineering, said during the Q1 2025 earnings call. “The key is that they will be affordable and that you'll be able to buy one,” he added.
Unless the automaker surprises us in the next four days, history suggests Tesla will likely delay the launch of these models, something Reuters has already reported on citing unnamed sources familiar with Tesla’s plans. That report claimed that the affordable models may now arrive by the end of 2025 or early 2026.
To be fair, launching similar-looking, stripped-down variants isn’t necessarily a drawback for Tesla, even if fans have been clamoring for something new.
Legacy automakers have done the same for decades. Mercedes-Benz, Audi and BMW all use modular platforms to spin out nearly indistinguishable vehicles across price points. I still can’t tell the EQS SUV from the EQE SUV without squinting. Rivian’s upcoming R2 looks like a smaller R1S and the buzz around it has been enormous.
So even if Tesla’s new models look like a stripped-down Model Y or Model 3—or even borrow cues from the Model S or Model X—they could still succeed with the right packaging and pricing. Those are things that truly matter and they may help Tesla claw back the market it’s rapidly losing to rivals.
Critics, and even some longtime fans, fear that CEO Elon Musk’s company may no longer be the trailblazer it once was in the EV industry. Sales are plunging across multiple regions, and the brand image has suffered due to the head-honcho’s cost-cutting activities in the government.
Still, the company remains a dominant force in the EV market. Company officials say its core focus is now robotics and AI, but it still has the production scale, engineering depth and margins to bring affordable EVs to market, an advantage few U.S. automakers can match.
And while it may no longer need to be a disruptor—it has already done that with the excellent Supercharger network and the Model Y and Model 3—it does need to sell more cars to bankroll its software and robotaxi ambitions. That’s because the regulatory credit system and tax credit are both under the guillotine in Congress.
Its window to deliver the cheaper EVs may be narrowing as rivals are catching up fast. Nissan’s all-new next-generation Leaf goes on sale in the U.S. in the fall. General Motors is reviving its popular Chevy Bolt EV in an all-new avatar. Ford’s affordable models under what it calls the “skunkworks project” are also in the pipeline.
And those companies don’t carry the same baggage Tesla does these days, which makes the timing of Tesla’s affordable EV even all the more critical. Just having the Tesla badge on them may no longer be enough. A timely launch could possibly make all the difference.
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