Sources hint at bold new Tesla model with surprising new details: 'This new information counters earlier rumors'

Unnamed sources quoted by Reuters say Tesla is planning to launch a lower-cost electric vehicle this year, reported Inside EVs.

Codenamed "E41," this new car will be a smaller version of the Model Y crossover and will cost at least 20% less to manufacture than the current Model Y.

The affordable Tesla will initially be built in Shanghai and will use existing assembly lines and technologies to keep costs low. Mass production will begin next year in China, followed by manufacturing in Europe and North America.

"This new information counters earlier rumors that Tesla's cheaper EV would be just a barebones version of the Model Y, not something unique unto itself," wrote Iulian Dnistran for Inside EVs.

For buyers, this smaller, budget-friendly Tesla could make electric vehicles more affordable to a larger audience. Less expensive EV options mean more people can switch from gas-powered cars to electric ones, reducing air pollution and helping create a healthier planet. Like when Tesla cut prices on the Model 3 in Mexico last year, this move could help more consumers save money while making an earth-friendly choice.

This announcement comes as Tesla faces slipping market share and sales across multiple regions. The company saw a sales decline in Europe last year, with registrations down 10.8% from 2023 numbers for the European Union and several other countries, according to InsideEVs. In China, Tesla's market share in the all-electric car market fell from 11.7% in 2023 to 10.4% last year, per Reuters. The United States saw an even more significant drop, with Tesla losing 10 percentage points of EV market share, ending 2024 with 45.4% for December, per InsideEVs.

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The new vehicle aligns with Tesla's statement during its fourth-quarter 2024 results that "plans for new vehicles, including more affordable models, remain on track for the start of production in the first half of 2025," as InsideEVs reported in a separate article.

While many details about the new EV remain unknown, it will likely use the same electric motors and battery packs found in the current Model 3 and Model Y vehicles.

Online reactions to Tesla news often highlight divided opinions. Case in point: As one InsideEVs commenter noted, "We've had this thing called 'inflation' for well over a year now. Aren't many other vehicle prices increasing as well?"

Another user countered: "Multiple EVs have seen price drops — most recently, Toyota dropped the price on their EV by several thousand dollars, and Ford did the same with their Mach-e a few months back. I recently bought an Ioniq 6 from Hyundai, and the price on that car barely changed with the latest model year."