Tesla’s upcoming budget variant of the Model Y has surfaced in new footage taken near the Giga Shanghai factory, appearing with camouflaged exterior and a simplified design aimed at cutting costs. Internally known as project E41, the lower-cost Model Y trim is expected to debut in the next quarter, stripped of many features found in the recently refreshed Juniper version.
The model appears to retain the same size and wheelbase as existing Model Y variants, suggesting Tesla is prioritizing manufacturing efficiency by maintaining its current production line. While initial speculation had suggested a smaller Model Y, CEO Elon Musk clarified during the second-quarter investor call that the upcoming variant would remain a Model Y trim—distinguishing it from the more compact, still-unreleased “Model 2.”
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Key differences in the test vehicle include revised headlight positioning, potentially signaling the removal of the LED light bar seen in the Juniper refresh. The rear design also lacks the distinct red reflector light projected onto the asphalt, and the vehicle’s interior has seen notable reductions.
The cabin reportedly omits ventilated seats, a rear display, A-pillar speakers, cupholder storage in the center console, and even clothing hooks. Upholstery has shifted toward a mix of vegan leather and cloth, signaling further cost-saving measures.
The budget Model Y is expected to debut with a starting price around $35,000, positioning it as an alternative for buyers once federal EV tax credits expire on September 30, 2025. Tesla appears to be focusing on offering a more accessible option in its lineup without altering the Model Y’s core structure, while simultaneously preparing a larger, six-seat Model YL variant with a longer wheelbase for release this fall.