Tesla revamped its core Model 3/Model Y lineup, but may be adding another crossover to the mix soon.
While Tesla is keenly focused on fully autonomous vehicles and robotics as part of its next leap forward, it still has to compete here and now with electric rivals across the globe. That’s particularly true in China, where it’s gunning to claw back market share against homegrown rivals like BYD and Geely. To that end, sources told Reuters (under condition of anonymity, being close to the project) that the company will produce a smaller and more affordable Model Y, codenamed “E41”, on its existing Shanghai production lines.
Supposedly, this car will draw heavily from the recently launched Model Y Juniper. However, to make a stronger downmarket push, it will cost 20% less to build, and as such appeal to a larger sect of buyers against the current Model Y’s $36,400 price tag (or 263,500 Chinese yuan, which is what the current model starts at over there). It’s unclear exactly how much smaller this car could be, or how its capability would differ from the Model Y we already know.
These sources tell Reuters that this smaller Model Y would initially launch from the Shanghai gigafactory in 2026 for the Chinese market — but it won’t only sell in China. The car will also reportedly be produced in Europe and North America (again, on the company’s existing production lines), though they did not say exactly when that may happen.
Tesla does not have a media relations arm, nor does it respond to requests for comment, so for the moment there’s no official confirmation that this vehicle is indeed happening. As it fights to regain ground in China and faces flagging sales in Europe, however, this would make a plausible addition to the brand’s portfolio, considering it scrapped earlier plans to build a significantly cheaper car — a $25,000-or-so Model 2 — to capture the entry-level market.
