Interior spy photos of what appears to be a simplified Tesla Model Y have surfaced online, first published by automotive blogger “Garage 42” (42号车库 with nearly 2 million followers). These images suggest Tesla is preparing to launch the more affordable variant of its popular electric SUV with several cost-cutting modifications.

During Tesla’s Q2 earnings call, CEO Elon Musk clarified that the long-rumoured affordable Tesla isn’t an entirely new model but rather a simplified version of the Model Y. According to Chinese auto media Yiche, his new variant is already in production and expected to hit the market in the fourth quarter of 2025.

The interior design shows changes aimed at reducing costs. The panoramic glass roof and rear entertainment screens have been eliminated. The front centre armrest area has been redesigned with a pass-through layout, creating a more spacious and practical cabin. Despite these simplifications, the steering column stalks have been retained, and the vehicle will likely continue to use the current model’s screen-based gear selection system.

Exterior modifications are also evident in the leaked images. Most notably, the continuous light strip across the front fascia has been removed, with headlights repositioned higher, giving the vehicle a look more reminiscent of the Model 3. The taillight design is expected to lose its central reflective light strip, further simplifying the design and reducing production costs.

Editor’s comment

In the first half of 2025, Tesla’s Model Y sold 171,491 units, remaining the sales champion among vehicles priced above 250,000 yuan (34,750 USD) in China. However, its advantage over other models has become increasingly narrow. In the same price range, Xiaomi’s SU7 sold 155,692 units. Moreover, Xiaomi’s YU7, which sold 200,000 units in an extremely short time, only launched on June 26. For the Model Y, XPeng, Li Auto, and Nio (Onvo) will all release highly competitive models in the second half of the year. Today’s Model Y no longer offers particularly high cost-performance in the Chinese market, making it imperative for Tesla to introduce a more affordable version.