Tesla’s Q2 2025 results discussion brought renewed attention to more affordable vehicles. Production had begun, with sales expected in the fourth quarter of 2025. At the time, reporting associated the programme with a less expensive Model Y-derived version rather than a completely new small car. This is an account of those plans and expectations as they were discussed in summer 2025.
The version was linked in reports to the internal project name E41. The distinction mattered: reducing the cost of an existing model could reach buyers sooner than developing a new vehicle from the ground up.
A simpler Model Y
The reported approach was to remove or simplify equipment to lower the entry price. Estimates circulating at publication suggested a starting point around $36,000, compared with the $44,990 base version used in the article’s US comparison. Those were period estimates, not a confirmed price or an Italian offer.
Using existing manufacturing capacity could reduce development and industrialisation time. The article discussed Fremont and Texas in that context, rather than a new dedicated factory for the long-rumoured compact car often called “Model Q”. That unofficial name did not establish an announced Tesla product.
What equipment was expected to change?
A video reported to have leaked from China appeared to show a simplified Model Y. The following differences were discussed as observations or expectations at publication, not a final specification for every market:
Exterior
- No panoramic glass roof.
- A simpler front end, with revised lights and no front light bar.
- Removal of the rear reflective strip.
- No optional tow hitch in the version being discussed.
- Removal of acoustic glass and some other premium details.
Interior
- Cloth seats, compared with the lower-cost Model 3 configuration offered in Mexico.
- No ventilated or heated seats in the speculative equipment list.*
- Removal of the rear touchscreen.
- Fewer speakers, estimated at around ten rather than fifteen.
- A redesigned, split centre console, compared in the report with Cybertruck’s layout.
- No coat hooks or rear parcel shelf in the configuration discussed.
- Simpler fabric and plastic trim.
*Some of these details were unconfirmed assumptions based on reducing costs. They should not be treated as a verified equipment list.
A quicker route to a lower price
The proposed approach differed from earlier expectations of a wholly new compact platform. In an uncertain market with pressure on margins, simplifying a familiar vehicle offered a way to reduce manufacturing complexity and bring a lower-priced EV to market sooner.
The trade-off discussed was between a more immediate, less costly derivative and the time and investment required for a more ambitious new design.
What could it have meant for Italian buyers?
At publication, an eventual European price of roughly €35,000–€38,000 was a hypothetical scenario. If achieved, and subject to any applicable incentives, it could have opened Tesla ownership to buyers for whom the existing Model Y was too expensive. It was not a price announcement or confirmation of incentive eligibility.
A lower price would also involve compromises in comfort and equipment. Buyers would need to compare space, range and access to Tesla’s charging and software ecosystem against those omissions. Driver-assistance options should not be described as a promise of unsupervised driving, and their availability depends on the relevant vehicle and market.
What about a smaller “Model Q”?
The article also discussed the possibility of a later, purpose-built compact Tesla. It linked that speculation to US LFP battery manufacturing and technology expected in 2026–2027, with a possible launch at least a couple of years away. Those connections did not amount to a confirmed “Model Q” programme or launch timetable.
Reaching a wider market
The central question in 2025 was whether a simpler Model Y could bring Tesla to a new group of buyers. A lower purchase price can expand the audience, but the result depends on the final equipment, range and local pricing. The strategy under discussion prioritised accessibility, accepting that some premium features might be left out.
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