Tesla’s Affordable EV Will Be Stripped-Down Model Y, Musk Confirms

Tesla has revealed that its promised ‘affordable’ electric vehicle (EV) is a cost-reduced version of the Model Y, ending months of speculation. 

Elon Musk confirmed this during a shareholders’ call yesterday, following the company’s first build in June, with a launch planned later this year.

Speculation Resolved

Musk’s announcement clarified earlier hints of new affordable models for 2025’s first half, which failed to materialise. CFO Vaibhav Taneja initially withheld details, but Musk interjected, stating, “the cat is out of the bag,” confirming the Model Y variant. 

This follows the cancellation of two cheaper projects, NV91 and NV92, in early 2024, as Tesla shifted focus to utilise underused Model 3 and Y production lines amid demand challenges.

Reports suggest the new model will feature less premium interior, omitting luxuries like rear screens and using cheaper materials, aligning with Tesla’s strategy to boost sales without new platforms. 

India Context

While this caters to cost-conscious buyers globally, India’s market faces a different reality. 

Nothing deemed ‘affordable’ worldwide, like the iPhone SE (₹44,900) or iPhone 16e (₹70,000), remains so in India due to high taxes, as customs duties and GST inflate prices quite a lot. 

Tesla’s Model Y, even in a cheaper guise, may follow suit, deterring price-sensitive Indian consumers. With no local manufacturing yet, tax burdens could render it uncompetitive against domestic EV makers like Tata Motors.

For context, the entry-level Tesla Model Y, without extras, carries a base price of ₹59,89,000 in India, inclusive of 5 per cent GST. Website estimates indicate an on-road price of ₹61,07,190 in Maharashtra, accounting for ₹7,500 road tax and EV subsidies. 

In Haryana, the on-road cost climbs to ₹67,33,869, driven by a hefty ₹6,34,179 road tax.

Also read: MG Cyberster Electric Sportscar Launched In India at ₹74.99 lakh