Affordable Tesla Model Y set for 2025 release, Musk says, aiming to increase vehicle sales

In a move aimed at expanding its customer base, Tesla has announced a more affordable variant of the popular Model Y electric SUV. The new model, priced at AUD $58,900 plus on-roads, is set to launch in 2025, according to reports.

Elon Musk, Tesla's CEO, made the announcement, hinting at a cheaper Model 3 sedan following suit. The affordable Model Y is expected to enter production as early as August or September of this year, but no details about cost cuts or price reduction have been revealed yet.

Tesla executives hope that the success of the affordable Model Y will help offset the heavy losses posted in the second quarter. The reduction in the average transaction price and increased costs also contributed to the profit slump.

Looking ahead, Tesla's future revenue is linked to its self-driving technology. The company aims to launch a robotaxi service and a fleet of driverless vehicles. However, President Trump's threat to end the $7500 government-sponsored electric car grant is unfavorable news for Tesla.

Currently, there are no specific companies publicly known to directly pay Tesla for robotaxis to support Tesla in achieving autonomy. Tesla itself is betting on its own autonomous technology and robotaxi service, as seen with its planned Cybercab robotaxi and small pilot fleet launching in Austin, Texas, in 2025.

Tesla's robotaxi is currently operating in a geofenced location in Austin, Texas, with limited service to select invitees who share rides with a backup human driver. The company is also working on extending the range of the Model 3 and unveiling a three-row Tesla Model YL.

The facelifted Model Y is struggling in key markets like China due to increased competition and Trump's tariffs. Sales in Europe have dropped dramatically, linked to Musk's political beliefs and previously close ties with Trump. The US government's roll-back of an emissions mandate that aimed to make 50% of cars electric by 2030 is also bad news for Tesla.

Despite these challenges, Musk admits there might be a few rough quarters for Tesla. He remains optimistic about the company's future, citing the potential of the affordable Model Y and the continued growth of the electric vehicle market.

Tesla's electric car credits from other car-makers decreased by 51% since Q2 2024 to $441 million. This decline, coupled with slowing sales, led to a 16% drop in Tesla's income to $US1.17 billion ($1.78b) in the second quarter.

In Australia, the Model Y outsells all other EVs. Spy shots of the new Model Y in China reveal it has lost the panoramic glass roof and rear entertainment screens, suggesting cost-saving measures. Tesla could offer more options on a subscription basis for the cheaper Model Y, further reducing upfront costs for customers.

As Tesla continues to innovate and adapt to market conditions, it remains at the forefront of the electric vehicle industry. With the affordable Model Y on the horizon, the company is poised to attract a wider audience and continue its growth trajectory.

Affordable Tesla Model Y set for 2025 release, Musk says, aiming to increase vehicle sales