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.
