Will Tesla's Long-Rumored 'Model Q' Really Be a Cheap Model Y-Based SUV?

Yahoo

14-03-2025

Tesla's upcoming mysterious, more affordable model is slowly coming into focus, as a new Reuters report states that mass production of the cheaper Tesla will begin in China in 2026.
The report, which cites three people with internal knowledge of the plans, claims this new model — initially brought to light in December 2024 and reportedly known internally as the "Model Q" — will cost approximately 20% less to produce than a Model Y. Reuters says the new EV is mainly being built to regain ground against cheaper competition in the Chinese market, but the mystery vehicle is also reportedly slated to be built in Europe and North America, with sales in those regions starting at a later date than in China.
What form exactly will this new Tesla take? All the Reuters report tells us is that it will be a lower-cost version of the Model Y and goes under the project codename of E41. If it's truly going to be a smaller and cheaper Model Y, that means Tesla is going the SUV route. (After all, it would otherwise seem very close to the Model 3, which is, in some ways, a smaller and cheaper Model Y.) The new car will also reportedly be built on existing production lines, which would suggest it's heavily related to vehicles already in production.
Our best educated guess here at Road & Track is that the mystery car will share a lot of parts with the Model Y, but probably come with a downsized battery pack using more affordable chemistry to lower costs. A lower power output than the Model Y also seems like a given — and understandably justified if the vehicle is lighter. There aren't many costs to cut inside the Model Y's interior, however, outside of de-contenting and removing features like heated seats, premium audio, sound deadening and so on.
If the new model costs approximately 20% less to produce than a Model Y, that could bring the starting price (before tax credits) down by about $10,000. That means an entry-level version would likely start in the mid-to-high $30,000 range in the U.S., before any state or federal tax credits are taken into account. Unfortunately, while the report specified a 2026 launch date in China, timing for the rest of the world is undefined.
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