‘Let the cat out of the bag there’: Elon Musk says the new, affordable Tesla coming in 2025 will just be a cheaper Model Y

More affordable models will be based on existing Model 3 and Model Y
Cost-cutting will include stripped-down interiors and reduced tech
The move is a bid to drum up sales, which have slumped in recent months

During a shareholders’ call that followed Tesla’s recent quarterly earnings announcement, Elon Musk “let the cat out of the bag” (as he put it) by stating that the much-hyped affordable Tesla will simply be a trimmed-down Model Y.

The divisive CEO didn’t go into any further detail, only that production is slated for August or September, but it is understood that the cheaper Model Y will be offered at a lower price thanks to a reduction of interior tech, the use of less expensive materials and a number of more affordable exterior flourishes.

While many sectors of the Tesla-buying community have been eagerly awaiting an all-new affordable model, which was once tipped to be a $25,000 Tesla that was rumored to be based on the Cybercab “unboxed” platform, Musk believes that making the Model Y more accessible will help buoy sales.

In the very same earnings call, Musk warned shareholders of a “few rough quarters to come”, commenting on the fact that the Trump administration had removed a number of initiatives and incentives that had previously proven a rich revenue stream for the company.

These include the regulatory credits that the company sold to more polluting rivals to help offset their carbon emissions.

To compound matters, The Guardian reported that figures published by the European Automobile Manufacturers’ Association (ACEA) revealed that sales of Tesla vehicles in Europe slumped by 33% to 110,000 in the first half of 2025, compared with 165,000 in the first half of 2024.

Elon Musk has been attempting to soften the blow to investors by stating that the company’s future lies in its Robotaxi and autonomous driving solutions, boldly claiming on the earnings call that “half of the population of the US will be covered by Tesla’s Robotaxi by the end of the year.”

This is despite the fact that his “paid-for” service is still limited to a number of select invitees, all of whom will have to share the ride with a Tesla safety operative and can only travel in a strictly geo-fenced area of Austin, Texas.

Tesla data suggests Autopilot is getting worse

While Elon Musk is still banging the drum for his autonomous driving systems, Tesla revealed an Autopilot safety report that suggests its camera-only autonomous driving technology has regressed in 2025.

The data highlights miles driven between crashes for Tesla vehicles with Autopilot features turned on, comparing that to the US average of miles driven between crashes.

Electrek has been reporting on this subject for years and clearly points out the many holes in Tesla’s cherry-picked data. But even when factoring in the various biases and discrepancies, the numbers clearly show that there were fewer miles driven between crashes in Q1 2025 than there were in the same quarter last year.

It is worth point out that this only relates to Autopilot, which is an inferior technology to Tesla’s Full Self-Driving (FSD) system.

But it’s still not a good look, especially when the CEO is boasting that customers will soon be able to use FSD without supervision – in other words, fully hands-off/eyes-off driving in a variety of driving conditions that very few manufacturers have managed to successfully crack.

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‘Let the cat out of the bag there’: Elon Musk says the new, affordable Tesla coming in 2025 will just be a cheaper Model Y