Teslas sales have been declining and to counter this the company is preparing to launch more affordable electric cars. After falling demand for Model 3 and Model Y Tesla is facing challenges in markets like China and Europe. Production of the new cheaper model is expected to begin in 2025. Teslas sales are dropping and to tackle this issue and boost overall sales the company will enter the market with cheaper EVs. In its Q2 2025 financial results Tesla informed investors that it had “begun manufacturing a more affordable model in June.” Due to the low demand for Model 3 and Model Y Elon Musk’s company is struggling in key markets like China and Europe. Elon Musk’s Plan For Tesla Cars Tesla stated that it has begun work on a more affordable model that will be positioned below the Model 3 and Model Y. The company revealed that large-scale production of this new EV is scheduled for the second half of 2025 wherein initial production will begin in the first half of 2025 (1H2025). Initially Tesla had planned to build the affordable EV on a new platform. However the new model will now use the existing architecture of the Model 3 and Model Y. It is expected to be a stripped-down version with fewer features. In terms of size the new EV will be smaller than the Model Y. Testing of this affordable model has also begun. Elon Musk Hopes For Comeback This isnt the first time Tesla has announced plans to enter the affordable EV segment. According to Electrek the company had earlier worked on a similar plan which was later scrapped by Musk. That project was popularly referred to as the “$25000 Tesla” with the codenames NV91 and NV92. Tesla was initially developing it on a new platform but Musk eventually rejected it. However Musk is now hopeful that Tesla will make a strong comeback in the European market especially as he anticipates approval for the company’s autonomous self-driving technology.