While the price point for an "affordable" Tesla hasn't been revealed, Musk has long talked about an affordable EV for around $25,000, which would be roughly half the price of the current Tesla Model Y. The company may be hoping that a cheaper Tesla would help the company boost sales during a difficult time period.

A smaller and more affordable Model Y that's 20% cheaper to produce was initially planned to be released in the first half of this year

The arrival of a new Tesla Model Y variant with pricing roughly on par with the Chevy Equinox EV has been delayed until late 2025 or early 2026, sources say.