Production plans for Tesla’s low-cost Model Y have been delayed again, according to industry sources, with a start date now slated for as late as early 2026.
According to Reuters, three sources with knowledge of the matter said production had been pushed back by at least a few months from Tesla’s most recently publicised production date of the first half of this year.
The brand is now reportedly offering a range of revised targets from the third quarter to early next year. The reason for the delay is not clear.
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Two of the sources confirmed that Tesla is aiming to produce 250,000 of the cheaper Model Ys in the United States by next year. Production is also planned for Europe and China, the latter of which being where Australia-bound Teslas are built.
Questions around plans for the affordable models, which will also eventually include a stripped-back Model 3, is set to be a key line of inquiry following Tesla’s first quarter earning results on Wednesday.
Low-cost Teslas have long been anticipated by customers and investors alike, with plans dating back as far as 2020 when CEO Elon Musk first floated a price tag of $25,000 (A$40,000) for future budget models.
The same price tag has since been floated for the incoming, fully-autonomous Cybercab, which is now also delayed.
Reuters reported that the new stripped-back Model Y will cost 20 per cent less to produce than the current version, presumably by losing some standard features and carrying a smaller, short-range battery pack. Tesla has previously said a 53kWh unit would replace the current Model Y's 60kWh battery.
An updated version of the current Model Y will land in Australian showrooms from next month with a starting price of $58,900 before on-road costs.
Positive news couldn’t come any sooner for Tesla, whose stock has fallen by 44 per cent in the US off the back of Musk’s controversial role in the Trump Administration's Department of Government Efficiency (DOGE).
Rising competition from Chinese EV brands, such as BYD, has also seen the brand’s small and aging line-up undercut in key overseas markets such as China, Europe and Australia, with Tesla recording its first-ever decline in annual deliveries in the fourth quarter of last year.
U.S. President Donald Trump’s huge 145 per cent tariffs on Chinese imports, including vehicle components, are also set to hit a quarter of vehicles Tesla produces in the US, according to Fortune.
In Australia, Tesla’s sales to March 2025 were down by nearly 60 per cent compared to the same period last year, with sales of the brand’s best-selling model in Australia (and globally), the Model Y, falling by 54.4 per cent.
BYD, meanwhile, has seen its sales in Australia grow by 95.6 per cent over the same period, though largely off the back of its plug-in hybrid Shark 6 ute.
Chinese electric car conglomerate Geely has emerged as another threat, with sales of its EX5 electric SUV – which is the cheapest model in its class in Australia – clocking 188 sales in just its first month.
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