Tesla is reportedly working on a more affordable version of the Model Y, which is projected to reduce manufacturing costs by 20 percent. According to a recent report from Reuters, this upcoming model will not be an entirely new vehicle but rather an updated iteration of the existing Model Y. This suggests that Tesla intends to introduce budget-friendly options while remaining closely aligned with its current lineup.

Previous reports have indicated that Tesla plans to commence its operations in India with a cost-effective electric vehicle. The company may launch an electric car priced at ₹21 lakh to initiate its presence in the Indian market. A report from CNBC-TV18 suggests that Tesla could initially produce these vehicles at its Berlin Gigafactory for the Indian market. Furthermore, it is anticipated that the price of Tesla's inaugural electric vehicle in India could be approximately ₹21 lakh (around $25,000).

Designated as E41, the new variant of the Model Y is expected to begin production in China in 2025, with plans for additional manufacturing in Europe and North America. While the Shanghai factory will primarily serve the Chinese market, Tesla also aims to increase production capacity in the United States.

Expected Pricing and Features

If the savings are carried across all areas of production—right down to Tesla's profit margins—the new Model Y may have a base price of about $25,000 to $30,000 before taxes. The model will likely adopt the same strategy as the low-cost Model 3 introduced in Mexico last year. That model saved costs by cutting some features such as heated seats and a rear entertainment screen while keeping the same motor and battery.

Design and Platform Considerations

There remains uncertainty regarding the extent to which the updated Model Y will be smaller than the existing version. A report from Reuters indicates that the vehicle will undergo downsizing; however, Tesla has not disclosed any significant alterations to its structure or body. The company has confirmed that this more affordable variant will be manufactured using existing production lines, integrating elements from both current and upcoming platforms.

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