Tesla’s most recent earnings call was a bit, well, brutal. A 71% drop in net income year-over-year has the electric car brand working to right the ship. One of the best options: produce a cheap Tesla to access budget-minded buyers. While the rumors of the past couple of years suggested a “Model 2” or a “Model Q,” the reality will look a lot more like a bare-bones Model Y. 

Tesla will produce a cheap EV this year that will ‘resemble in form and shape’ the cars it currently makes

For years now, the rumor mill has churned out mention of a cheap Tesla to slide in under the price point of the brand’s current base, the Model 3. The entry-level, single-motor Model 3 Long Range starts at around $42,490 before the $7,500 federal tax credit. That’s not too bad, considering the average price of a new EV in the United States is around $55,000 as of Q1 2025.

Still, offering nothing below the $40,000 mark leaves the electric automaker miles away from cheaper competitors like the Nissan LEAF, MINI EV, and Fiat 500e. But that might change as early as summer this year. During the same disastrous earnings call, Tesla CFO Vaibhav Taneja made mention of a cheap EV slated for production in June.

That might seem quick. After all, it typically takes years to design and produce a new car. But this won’t be an all-new, ground-up addition to Tesla’s current five-model consumer car lineup. Instead, all signs point to a less-luxuriously-appointed and stripped-back variant of the current Model Y, the brand’s best-selling EV. 

Tesla has already been working to get production of the updated “Juniper” Model Y into full swing. Currently, Tesla makes the Model Y at the Fremont factory and Gigafactory Texas. It stands to reason that the automaker will use the existing assembly lines for the wallet-friendly Model Y lookalike. Better yet, the cheap Tesla is targeting a $30,000 price point. While that doesn’t quite match the once-rumored $25,000 mark, it’s a step toward appealing to previously inaccessible would-be EV buyers.  

That said, the frill-free Model Y variant might not be alone. Instead, Tesla may produce a similarly stripped-down version of the Model 3. Lars Moravy, Tesla’s vice president of vehicle engineering, confirmed that the new EVs (plural) will be familiar. “The models that come out in the next months will resemble in form and shape the cars that we currently make,” Moravy said.