Expect Tesla to launch a product barrage in 2025 focused on affordability.
Tesla’s appeal to buyers is increasingly through price cuts, cheaper loans, and lease deals. In order to sustain EV market dominance, Tesla is planning new vehicles that focus on lower cost out of the gate.
Juniper: A better Model Y, same price
The refresh of the Model Y seems a sure thing. Likely at the same or slightly lower price than the current Y, now starting at about $37,500 with the federal tax credit. In order to keep prices down for the Model Y — the best selling EV in America — and all of its vehicles, Tesla is on a crusade to reduce costs. “There are numerous work streams within the company to squeeze out cost without compromising on customer experience,” said Vaibhav Taneja, Tesla Chief Financial Officer, in October, adding that Tesla achieved its lowest cost per vehicle in Q3. And CEO Elon Musk has underscored the effort to reduce costs. “The amount of work required to make a lower-cost car is insanely high,” he said in October.
Details of the Model Y Juniper refresh are pretty straightforward since it will mirror the Tesla Model 3 refresh late last year. In fact, just go to the Model 3 landing page to get a preview of key design tweaks, including changes in the body style (front hood, front facia, headlights, taillights), improved aerodynamics, quieter ride, updated interior, and possibly new battery technology
Tom Libby, an analyst at at S&P Global Mobility, said the Model Y, of any vehicle in Tesla’s lineup, will have the most impact on Tesla’s bottom line in 2025. “If I had to pick one [in 2025], I would say a refreshed Model Y,” he said. The Model Y dwarfs any EV competition in the U.S., outselling the next closest non-Tesla competitor by more than 73,000 vehicles in the third quarter. But Libby believes a too-subtle refresh of the Model Y could “require more incentives to sell.”
Cheaper Cybertruck
While not a certainty, a rear-wheel-drive version of the Cybertruck could arrive in 2025. As recently as a few months ago, Tesla was selling a $60,990 RWD model (it was taken down in August). That’s almost $19,000 less than the least expensive AWD Cybertruck ($79,990) currently on the Cybertruck page. “Making more affordable versions [of the Cybertruck] available could help sustain momentum,” Stephanie Brinley, an analyst at S&P Global Mobility, told me in an email earlier this year. Also expect the arrival of a range extender option for the existing models, which could push the range up to 445 miles.
Affordable Redwood /“Model Q”
While Musk has touted new “affordable” Teslas in both the Q2 and Q3 earnings conference calls, no specifics were given. Recent reports, however, point to a new mass-market Tesla codenamed Redwood, dubbed Model Q by Deutsche Bank, due in mid-2025. It’s a little murky what exactly this is. Is it Redwood? Or just a ᵴtriƥped down Model 3 or Model Y? Or a wholly new affordable vehicle beyond Redwood? The Q would reportedly sell for $30,000 but that includes the $7,500 federal tax credit, which is now in doubt because of objections to the credit by the incoming Trump administration. Separately, recent comments from AutoForecast Solutions also point to a more affordable compact SUV “𝑏𝑎𝑏𝑦 Model Y” coming next year that would compete on price with the new Chevy Bolt, which is due sometime in 2025.