At this point, it feels like Tesla might never make an affordable car

Tesla hasn’t had the greatest year so far, with its stock plummeting, sales dropping, and CEO Elon Musk’s recent political activity. To make matters worse, it seems that its long-awaited, more affordable electric vehicle (EV) has been delayed.

According to a report from Reuters, sources have informed the publication that Tesla has postponed the start of production of its new low-cost electric SUV. The new model is reportedly a “stripped-down” version of the Model Y, and production was expected to begin in the US in the first half of the year.

It’s unclear why and exactly how long production has been delayed, but it could be “a few months,” which means there’s a chance Tesla’s more affordable electric SUV might not make its debut until 2026 now, if it suddenly doesn’t get delayed again or canceled.

Elon Musk first teased a low-cost Tesla in 2020

The new low-cost Model Y will be produced in the US to start

Tesla CEO Elon Musk first teased the idea of a low-cost vehicle all the way back in 2020. “About three years from now, we’re confident we can make a very compelling $25,000 electric vehicle that’s also fully autonomous,” Musk said at Tesla’s 2020 shareholder meeting. Fast-forward nearly five years later, and that “compelling $25,000 electric vehicle” platform was canceled in favor of lower-cost versions of the Model Y and Model 3, as well as self-driving taxis.

Reuters reports that Tesla aims to produce 250,000 of its low-cost electric SUVs in the US in 2026, under the codename E41. The vehicle will eventually be produced in Europe and China as well.

Tesla recently released its redesigned Model Y, with deliveries usually available within a few weeks. The Long Range All-Wheel Drive model starts at $48,990, before a $7,500 federal tax credit that reduces the price to $41,490. It’s unclear how much the stripped-down version of the Model Y will cost just yet.

Concerns about tariffs affecting prices are currently prevalent among many automakers, as the Trump Administration’s reciprocal tariffs are still in effect (though recently reduced), including up to a 145% tariff on goods imported from China. However, Tesla has reportedly increased its sourcing of parts from North America over the past two years, which suggests that its upcoming low-cost SUV may not be significantly impacted.

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The cost of electric vehicles presents a significant barrier for many consumers considering the switch from gas to electric. I would have gladly purchased an EV back when I got a new sedan in 2021 if the cost hadn’t been nearly double. Given that Tesla reported its first decline in annual deliveries last year, there is no doubt that there is hope among shareholders that a new low-cost EV could turn things around for the company.

It’s also no secret that Tesla’s reputation has taken a hit this year due to Musk’s recent political activity, along with the Cybertruck’s recalls and poor sales. In my opinion, if there’s anything that could potentially reinvigorate Tesla’s brand (aside from Musk being less controversial), an affordable EV would be it.

If an SUV isn’t your thing, a stripped-down, low-cost version of Tesla’s Model 3 sedan is reportedly also in development, but it’s unclear when it’s expected to launch. I’m extremely curious to see how Tesla’s lower-cost Model Y turns out. Hopefully, this production delay isn’t a sign that Tesla is considering canceling it. However, after so many years of hearing about affordable Tesla models potentially coming, I’m beginning to wonder if it will ever actually happen.

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