Undisclosed Tesla model.
UPDATE: While anticipation builds for the Model Y refresh, CEO Elon Musk has also repeatedly referenced more affordable models coming in 2025.
(Updates with news about Model Q. See below.)
Model Y update is big for buyers
Coming up on the 5 year mark, the Model Y is overdue for an update. It’s top-of-mind for many considering the Y, the best selling EV in America. And critical for Tesla because the crossover is the company’s highest-volume vehicle. But it’s not a big mystery what Juniper — an internal codename — will be. The refreshed Model 3, updated in late 2023, already incorporates many of the changes expected in Juniper, including tweaks in the body style (front hood, front facia, headlights, taillights), improved aerodynamics, quieter ride, updated interior, and possibly new battery technology. There will of course be some surprises but not an overhaul. See this story for a detailed list of expected changes.
But Musk has said more about a new, “affordable” Tesla
While Musk has said precious little about a Model Y update other than saying in June that “No Model Y ‘refresh’ is coming out this year” on X, he and other executives have talked several times about a new affordable vehicle. As recently as the third quarter earnings conference call in October, Musk said, “we are still on track to deliver our affordable models starting in the first half of 2025” — after saying more or less the same thing in the second quarter call in July.
Though not officially named by Tesla, analysts often use the Model 2 moniker to identify the car. “The vehicle to be introduced may have dual purpose for consumer sales and robotaxi use,” Stephanie Brinley, an analyst at S&P Global Mobility, told me earlier this year. Meaning the car could be part of Tesla’s fully autonomous ride-hailing vehicle (aka Cybercab/Robotaxi) strategy, which is Musk’s primary obsession.
UPDATE: a fresh report (via Teslarati) claims Tesla is planning to launch the Model Q, an affordable EV for less than $30,000, in the first half of next year to compete with vehicles like the low-cost BYD Dolphin. But the price of the vehicle will jump to over $37,000 without the federal tax credit (see more on this below).
What can buyers expect?
To the consumer, an affordable Tesla means something priced less than the least-expensive Tesla offered today, which, including the $7,500 federal tax credit, is $35,000-$36,000 for a Long Range Rear Wheel Drive Model 3.
“In about three years from now, we are confident we can make a compelling $25,000 electric vehicle that is also fully autonomous,” Musk said in 2020. Today, we’re probably talking closer to $30,000. But Musk has been pretty vague about pricing specifics, though the $25,000 – $30,000 range has been mentioned.
Is the $7,500 credit included?
What’s increasingly uncertain is the fate of the $7,500 federal EV tax credit. That’s a critical component in bringing EV prices below $40,000 and, presumably, bringing a new affordable Tesla below $30,000. And the price-deflating power of the credit doesn’t only help Tesla but is a big factor in the sales of General Motors’ growing stable of Chevrolet and Cadillac EVs, GM-manufactured Honda EVs, and future Ford and Rivian EVs too.
The problem is, President-elect Donald Trump’s transition team is exploring the possibility of eliminating the credit according to recent reports, most notably stories in the New York Times, “Trump Wants to Kill the E.V. Tax Credit,” and Reuters. which cited people with knowledge of the plans. Musk in July said, in a backhanded way, that he supports the ending of the credit — that there would be “some impact, but I think it would be devastating for our competitors and for Tesla slightly.”
Trump can’t just turn off the spigot unilaterally because Congress would need to get involved but for consumers who want to guarantee that they can shave off $7,500 from the price of an EV, timing is of the essence. “Buy before January 20” may be the watchword.
“The potential elimination of the federal tax credit for electric vehicles by the Trump administration — without another form of incentive to replace it — could derail the trajectory of EV sales in the United States,” said Jessica Caldwell, Edmunds’ head of insights, in a statement.
[Updated on December 9, 2024]
