Catenaa, Tuesday, October 07, 2025- Tesla is set to finally reveal its cheaper EV on Tuesday, as the EV maker looks to grow sales volumes after falling in recent quarters.
The new Model Y variant will “lack certain features and use less premium materials to offset the loss of the up to $7,500 federal tax credit.”
The federal EV tax credit expired in the US on September 30. CEO Elon Musk said in the company’s second-quarter earnings call that the cheaper Model Y would come out after the tax credit expires.
Tesla stock gained more than 5% on Monday after the EV maker posted gifs on Sunday of a spinning company logo with the date “10/7” and what appear to be car headlights shining through smoke. Shares pulled back by 1.5% in trading on Tuesday.
Expectations for the vehicle include front lighting without the full light bar, a metal roof instead of glass, smaller infotainment screens and likely no second-row screen, and removal of ambient lighting and some sound-deadening material.
It is also expected that Tesla has wrung out costs from its batteries and electric motors to make the vehicle cheaper.
Tesla said following Q2 earnings that the first builds of a more affordable model occurred in June, with volume production planned for the second half of 2025.
Tesla’s release of the cheaper Model Y is expected to help grow volume for the automaker, which has seen sales dip in recent quarters, although Q3 sales jumped as buyers bought EVs ahead of the tax credit expiration.
Last quarter, Tesla CFO Vaibhav Taneja said he expected a pull forward of sales in Q3 because of the tax credit expiration, and the numbers back up that claim.
Tesla reported Q3 deliveries came in at 497,099, easily topping Bloomberg consensus estimates of around 439,800 and the 462,890 units delivered a year ago. Tesla said Q3’s total was a new quarterly record for the company.
