The Tesla Model Y Thread

Affordable Tesla EV launch in the US faces delays

The long-awaited launch of Tesla's more affordable electric vehicle in the United States is facing more delays. Customers who were hoping to snag a cheaper Tesla this year will have to practice their patience for at least several more months, according to recent reports. This new EV is widely understood to be a simplified version of the popular Model Y.

Last year, Tesla's CEO, Elon Musk, adjusted the company's strategy. He decided to shift focus away from developing an entirely new, lower-priced $25,000 EV on a next-generation platform. Instead, the automaker opted to produce more budget-friendly electric cars based on the existing architecture of the Model Y.

These upcoming vehicles are expected to be "stripped-down Model Ys," featuring fewer amenities and less expensive materials. Tesla initially announced that these cost-effective EVs would become available in the first half of 2025. Sources now indicate that the US launch of this lower-cost Model Y, internally known as E41, will be delayed by at least several months.

Revised timelines suggest a potential release between the third quarter of this year and early next year. The report also indicates Tesla's goal to manufacture 250,000 units of this new model in the US by 2026, aligning with the current production capacity of their Gigafactory Texas and Fremont facilities.

Similar reports originating from China have also described Tesla's upcoming affordable EVs as simplified versions of the Model Y. These reports draw parallels to a recent version of the Model 3 launched by Tesla in Mexico. The Mexican Model 3 keeps its core features but skips elements like the rear-seat screen and ambient lighting, and it uses fabric upholstery instead of Tesla's customary vegan leather.

 
Tesla Q1 results are in and the numbers don’t lie

Electric car giant Tesla faced a challenging first quarter in 2025, reporting a huge drop in both revenue and profit compared to the previous year. The company's long-awaited Q1 earnings report revealed a 20% drop in automotive revenue, falling to €13 billion from €15.68 billion in the same period of 2024. Overall revenue also saw a decline of 9%, settling at €17.43 billion. The results fell short of analysts' expectations, which had predicted revenue of €19.02 billion.

The drop in automotive revenue, a core component of Tesla's business, was attributed in part to necessary updates at its four vehicle manufacturing facilities. These upgrades are underway to facilitate the production of a refreshed version of the highly popular Model Y. Tesla also pointed to lower average selling prices and increased sales incentives as factors that negatively impacted both revenue and overall profitability during the quarter.

Net income for the first quarter experienced a big downturn, plummeting by 71% to €369 million, or €0.11 per share. This is a considerable decrease compared to the €1.25 billion, or €0.37 per share, reported in the first quarter of the previous year. Operating income also saw a substantial decline of 66%, falling to €360 million from €1.05 billion, resulting in an operating margin of just 2.1%. The company indicated that this decrease in operating profit was influenced by lower vehicle selling prices, a reduction in the number of vehicles delivered, and increased expenses related to its artificial intelligence initiatives. Earlier in April, Tesla reported a 13% year-over-year decrease in vehicle deliveries for the first quarter, totaling 336,681 units.

Adding to the complexities, Tesla acknowledged the increasing uncertainty within the automotive and energy sectors. The company highlighted that rapidly evolving trade policies are negatively affecting the global supply chain and the cost structure for Tesla and its competitors in the EV market. Tesla noted that this dynamic environment, coupled with shifting political sentiment, could have a considerable short-term impact on the demand for its electric cars.

 
More seats and more space - three-row Tesla Model Y reportedly just around the corner

Tesla is reportedly preparing to offer a more spacious version of its popular Model Y electric SUV in China. According to a recent post by a well-known automotive blogger on Weibo, production of a three-row Model Y with a longer wheelbase is expected to start shortly after the Labor Day holiday in China, which runs from May 1 to May 5.

This potential expansion of the Model Y lineup should improve the vehicle's appeal in the world's most competitive EV market. Tesla released the refreshed five-seat Model Y in China earlier this year, but the rise of local EV manufacturers is taking a toll on its dominance. The company's Chinese website already hints at the possibility of a three-row configuration, even though only the five-seat variant is currently available.

To stimulate falling sales, Tesla has been actively promoting the Model Y in China. Initially, the company offered a three-year, zero-interest financing option for customers buying any version of the updated Model Y before the end of April. This incentive has now been bumped to a five-year, zero-interest financing plan, valid until June 30th.

The Weibo blogger also mentioned a new Model Y internally codenamed E80, but it remains unclear whether this refers to the rumored three-row version. Separately, reports from last month indicated that Tesla's "lower-priced Model Y," known internally as "E41," will go into production at the Shanghai plant in 2026.

 
Tesla's European sales continue to skid despite new Model Y arrival

The long-awaited arrival of the updated Model Y doesn't seem to make much difference, as sales of Tesla electric cars continue to decline sharply across key European markets in the second quarter of 2025.

Over the past year and a half, Tesla has witnessed a noticeable decrease in its European deliveries. In 2024, the American automaker shipped 11% fewer vehicles to the continent compared to the previous year, even with increased production at its Gigafactory in Berlin, which specifically manufactures the Model Y for European consumers. This initial dip has now turned into a serious slump in 2025.

In the first quarter of 2025, Tesla's European sales plummeted by 37%, with Tesla shareholders hoping this decline was due to the transition to the redesigned Model Y. The update initially limited its availability as production lines were adjusted. Tesla itself claimed that this changeover contributed to lower delivery numbers.

Unfortunately for the company, recent data indicates that the arrival of the new Model Y has not reversed this negative trend. Across five key European markets that provide daily car registration updates, Tesla's sales are down approximately 50% so far compared to the start of the second quarter of 2024. Alarmingly, these figures also lag behind the already weak sales numbers from the first quarter of 2025, even with the new Model Y now available.

 
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