Tesla’s ‘More Affordable Models’ Are Set To Enter Production Within Months

Tesla plans to begin manufacturing budget-friendly vehicle models in mid-2025 to meet growing customer demand for affordable electric vehicles (EVs). Company executives have confirmed that production of these new models will start in the first half of 2025, utilizing both upcoming and existing platforms. While the new models will be built on Tesla’s standard production lines, they are not expected to achieve the originally anticipated cost savings.

In its first-quarter 2025 financial report, Tesla reported declines in both production and deliveries, along with a 16% drop in revenue and a 66% decrease in operating income compared to 2024 figures. Despite these setbacks, Tesla remains optimistic that its upcoming affordable models will help revitalize sales, even as global economic uncertainty and shifting trade policies continue to affect the market.
“Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025,” Tesla said in its slide deck.

Tesla’s Chief Financial Officer, Vaibhav Ateneja, emphasized the company’s focus on developing lower-cost models and highlighted the critical role that Full Self-Driving (FSD) technology will play in driving future demand during Tesla’s most recent earnings call. In parallel, Tesla is working on enhancements to its Model 3 and Model Y platforms to reduce production costs and improve features.

For years, the automotive industry has anticipated a Tesla EV priced under $25,000, with speculation suggesting that the Texas Gigafactory could lead production, followed potentially by expansion to facilities in Mexico. Although specific details have yet to be announced, Tesla is committed to broadening its customer base by delivering more accessible EV options.

Entering this market segment is increasingly strategic, as established automakers and emerging Chinese competitors continue to release affordable EV models. Tesla’s push to scale production of its low-cost vehicles will be key to regaining momentum in the rapidly evolving electric vehicle industry.