Tesla plans smaller models, 20% cheaper production

Internal sources say new electric vehicles will be based on the model y juniper’s large number

Last year, Tesla set a new record by selling more than 657,000 cars in China. But sales stagnated in early 2025, and cheap models may be exactly what companies need to regain momentum. The new version will be reportedly based on the “juniper” iteration of Model Y, although some details are not yet clear.

Read: In the first half of the year, Tesla confirmed the new “Affordable Model” through next-generation technology

China Site 36KR recommends developing this new EV through the “DEPOP” process, a simplified approach designed to quickly launch new models with minimal modifications. at the same time, Reuters Three sources familiar with the matter were cited, who spoke anonymously because the project remains confidential. According to them, the vehicle was developed under the project code “E41” and will be built on an existing production line, with mass production scheduled to begin in 2026.

Basic model Y or smaller model Y?

China reports suggest that the base model Y will be a simpler version, similar to the budget 3 Tesla launched in Mexico last year, including features such as vegetarian leather for cloth seats, removed the second row of touch screens and omitted ambient lighting at about $4,000 off.

However, Reuters sources suggest that the new Y-based EV will actually be smaller than the refreshed version of the crossover version, with a cost of at least 20% less production, which starts at 263,500 yuan (currently at about $36,500).

This cheaper, reduced model may be One of Tesla’s “more affordable” models says it is developing in January. At the time, it said these new models would use aspects of their next generation and current platform.

Made in China, Europe and the United States

According to the same internal source, the cheaper, smaller Y-based EVs will target primarily the Chinese market to help Tesla maintain its market share. However, the car will also be produced for Europe and North America, although there is no clear timetable to enter these markets.

Despite competition, the 2025 Y model seems to perform well in China. Local reports suggest Tesla has received more than 200,000 reservations for electric SUVs and has begun delivery.