Tesla’s cheaper Model Y finally breaks cover

Tesla’s long-rumored more affordable electric vehicle won’t be out until next year, but it was recently spotted uncamouflaged on a highway in Texas. And no, your eyes are not fooling you; it’s just a cheaper version of the Model Y.

The rumor that the affordable EV would just be a bare-bones Model Y has been circulating ever since Elon Musk canceled a previous model that was to be built on an entirely new platform. The so-called “Model 2” was meant to be Musk’s long-promised “$25,o00 EV” that at one point was presented as having a Cybertruck-inspired design. Musk reportedly canceled the new model in favor of building the steering wheel-less Cybercab, which was introduced last year and is expected to go into production in 2026.

At the same time, Tesla says it will go into production on a more affordable version of the Model Y, which currently starts at around $45,000. A variant with Florida manufacturer plates was recently spotted driving near Tesla’s Gigafactory in Austin, Texas, by aerospace engineer Ryan Mable, who posted some photos on X. (It was also posted on Reddit, but I think Mable posted his images first.)

So what’s different about this Model Y? For one, the front light bar that was first introduced with the “Juniper” refresh is missing. Instead, Tesla has gone back to using separate headlights, while keeping the newly narrow lights from the refresh. The rear light bar is also missing, replaced by a horizontal black line. And there’s no “TESLA” badging in the rear as we saw with the Juniper refresh.

The tailgate also seems to have a bit of an overbite, with the trunk lid sticking out a little bit over the plastic rear fascia above the license plate. The fit is less than snug, which could trigger flashbacks among Tesla owners who remember the bad old days of panel gaps and other fit-and-finish problems.

Otherwise, the new budget Model Y looks very similar to the current version. We still don’t know what kind of battery this thing will have, and how that will impact energy capacity, charging, and range. But there have been a few other details that have leaked in recent days, including a bunch of revelations extracted from a recent firmware update that was noticed by Tesla hacker GreenTheOnly.

According to Green, the new Model Y will come in all-wheel and rear-wheel drive versions. Tesla is getting rid of amenities like the moonroof, power mirror folding, the second row display, and puddle lamps. The cabin lights, mood lighting, suspension, and seat controls are all getting downgraded. And the 19-inch wheels are getting swapped for smaller 18-inchers. Tesla hasn’t revealed a price yet, but rumors are it will start at $39,999 — which is a far cry from the promised $25,000 EV.

Of course, the prototype is just a prototype, and all these changes that have been leaked are just preliminary. We really don’t know what will end up in the final version, but it certainly establishes a baseline of what to expect.

As Tesla starts stripping things out to help reduce the price of the Model Y, it will run up against its overarching aim to enable all of its vehicles to be fully autonomous. Could they remove the computer that powers Autopilot and Full Self-Driving? What about external sensors? The Model Y currently sports eight cameras; if Tesla removes some of them, will FSD still work? (Not that it works flawlessly with eight cameras.) The tradeoffs could get pretty steep if Tesla starts down that road.

The best place to shave costs is the battery, which typically is the most expensive component in an EV. Tesla’s cheapest EVs already utilize low-cost lithium-iron-phosphate (LFP) chemistries, nearly all of which are supplied by Chinese battery manufacturers. The company recently started production on its own LFP cells at its factory in Nevada, so it stands to reason that the new, cheaper Model Y is likely to use these batteries.

Tesla just had a record sales quarter, due primarily to the expiration of the $7,500 federal EV tax credit. Musk has warned of a few “rough quarters” as Tesla’s sales are likely to drop after vehicle prices rise. Having a more affordable model will potentially help Tesla bridge the gap to the promised future of self-driving cars and humanoid robots — if we ever get there at all. But will customers go for a barebones version of a car that’s already been on the road for six years and counting?