- Tesla expects to begin production of more affordable EVs in June.
- It managed to prepare its production lines for new models at the same time that it upgraded the tooling for the refreshed Model Y.
- The automaker warns that "changing political sentiment" could still affect the brand in the near term.
Tesla just posted its first quarterly earnings of 2025. Buried among the bruised financials and flatter-than-expected figures was something that Tesla clearly hopes will put the company back on its feet: the promise of affordable options. We've known about the tease of a new affordable vehicle for a while, however, Tesla is stressing that its upcoming products are "as critical as ever."
Now, the automaker hasn't publicly announced what its affordable option will be—rumors have swirled whether it would be a stripped-down Model Y, or some new vehicle based on the underpinnings of the upcoming Cybercab product. What we do know is that Tesla has apparently already prepared its production lines for on-time production during the first half of the year.
This comes as a surprise to many folks who have been following Tesla's progress on upcoming vehicles, especially since it comes just days after Reuters reported that Tesla was rumored to announce the delay of its affordable EV. Even investors predicted that Tesla would fail to deliver the vehicle on time, something that pushed the company's stock price down even further.
Apparently, a delay isn't locked in. During the Tesla's quarterly earnings call, CFO Vaibhav Taneja confirmed that the start of production for a cheaper model is "still planned for June."
Wondering how Tesla plans to make that tight timeline work? The automaker says that it managed to squeeze in the preparation for its new models during the same time that it was outfitting its factories for the updated Model Y, meaning it may not have to do much (if any) retooling to make the magic happen.
Here's what Tesla had to say in its earnings report:
As guided, switchover of production lines for the New Model Y resulted in several weeks of lost production. During the switchover, we also prepared our factories for the launch of new models later this year. Given economic uncertainty resulting from changing trade policy, more affordable options are as critical as ever.
Let's connect the dots here for a second, though. Tesla has promised a "next-generation" affordable EV priced under $30,000 for a while—whether or not that figure comes with an asterisk that includes the EV tax credit isn't really known. There's also the Cybercab and the Semi due to start some form of low-volume production this year. Technically, any of those would qualify as a "new" vehicle, and it's unclear if Tesla's call for "affordable options" refers to a new platform being cheap or if a gutted Model Y shrouded in new clothes is on the horizon.
It would seem that the answer is hidden in the details, as noted by Tesla's VP of Vehicle Engineering, Lars Moravy. During the earnings call, Moravy noted that Tesla is prepared to begin production and is simply working to knock down "last-minute issues [...] one-by-one" leading up to the launch. There's just one caveat: Tesla expects the ramp-up of its affordable model to be slow due to the current turmoil across the auto industry.
Moravy also noted that Tesla's biggest constraint when designing the affordable model was the existing production lines. To ensure that the vehicle is hit as close to its sub-$30,000 price target as possible, the car needs to be built on existing lines rather than its own line—this could indicate that it's likely close to the stripped-down version of a Model Y as predicted, and less like the Cybercab, which will have a unique "unboxing" assembly method.
Moravy spoke to the car's form factor a bit more in-depth when probed for details by analysts on the call:
With the recent upgrades to the Model 3 and Model Y platforms, we've made some pretty great cars at pretty great prices and we've added a bunch of features. Our intent is not to make a car that is any worse than any car we've ever produced in the past.
The models that come out in the next months will resemble in form and shape the cars that we currently make, and the key is that they will be affordable and that you'll be able to buy one.
So while not an outright admission that the car would be a cheaper version of the Model Y, Moravy did leave the door open for Tesla's potential launch of a more affordable Model Y and Model 3 rather than a new model altogether.
Tesla needs a win. Its financials show that consumers aren't buying Teslas like they used to—but we knew that. During a time when the entire U.S. EV industry was up 11.4%, Tesla's global deliveries were down 13%. But, hey, Tesla did warn us in the release that "changing political sentiment" could have an impact on its demand in the near term.
Will new or affordable models be enough for Tesla to get its groove back? Nobody really knows how the market will react, but if the company really wants to reverse its fortunes, it had better be a hell of a lot more innovative than just a slimmed-down Model Y.
