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Tesla will attempt to arrest or reverse sliding sales in Australia and across the globe by unveiling a new and cheaper Tesla Model Y that will bring Elon Musk's best selling vehicle closer to its Chinese competitors than ever before, according to new reports.
First broken by news agency Reuters, and reported by US outlet Automotive News, the cut-price Model Y will be built in Shanghai, but is also destined for sale beyond China, with production scheduled for 2026.
Codenamed “E41”, the new vehicle will be built on the same lines as the Model Y, but could be smaller, and will be substantially cheaper.
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The news is in keeping with Musk’s own promises to offer cheaper variants, recently saying on an earnings call that the vehicles would “utilise aspects of the next-generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”
The new reports have put a price on the model for the first time, suggesting Tesla is targeting a sticker price 20 per cent lower than the equivalent Model Y.
In Australia, frequent price cuts saw the outgoing Model Y drop to $55,900. Using that as a guide, the new and cheaper variant could drop below $45k, in its most affordable guise.
Powertrain, battery and specification details are yet to be revealed, but we can look to Mexico for clues, where Tesla launched a stripped-back Model 3 (think cloth seats, single-colour interior lighting, no rear-facing screens and no seat or steering wheel heating) for around US$4,000 ($6322) cheaper than the previous base model.
Tesla sales have plummeted in Australia over the first two months of 2025, falling by more than 65 per cent, from 6772 in 2024 to 2331 this year. Most commentators attribute the fall to a combination of ageing product (the updated Model Y is about to launch in Australia), increased competition from often-cheaper Chinese brands, and Musk’s increasingly controversial public image.
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