Tesla is reportedly moving ahead with plans in China to produce lower-cost versions of its Model 3 and Model Y vehicles, as the automaker continues efforts to expand its lineup and boost affordability in major global markets.
According to Chinese media outlet 36kr, the projects — internally codenamed E41 and D50 — are simplified variants of Tesla’s existing models and have entered the validation testing phase. The report, citing multiple sources, said both vehicles reuse parts of the design and validation documentation from the current Model 3 and Model Y. Production of these models could begin around mid-2026 or later.
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Tesla’s Shanghai factory, which serves both the Chinese and European markets, is expected to lead the rollout of these new variants. Industry analysts see the move as a step toward introducing lower-priced vehicles in markets where price competition has intensified.
The development follows Tesla’s recent introduction of “Standard” variants for the Model 3 and Model Y in North America earlier this month, which reduced starting prices by roughly $5,000–$5,500 through the removal or simplification of more than 20 features.
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Earlier this year, Tesla’s China team was reportedly responsible for leading the development of a lower-cost Model Y using an internal “depop” approach — a strategy designed to streamline configurations and speed up product launches while retaining essential vehicle functionality.
The company’s decision to revive its simplified model projects in China indicates growing concern over maintaining sales momentum amid fierce competition from domestic automakers. Meanwhile, Tesla is also said to be restarting development on two additional vehicle programs — NV91 and NV93 — aimed at producing smaller, more affordable models.
The NV91 project, associated with the $25,000 compact EV mentioned previously by Tesla CEO Elon Musk, was initially planned for mass production in August 2025 but was paused earlier this year. The reported revival of this initiative suggests Tesla is again prioritizing its push toward a broader and more cost-accessible product lineup.