Source: Tesla

Tesla (NASDAQ:TSLA) is reportedly preparing two “simplified” vehicle models for production in China, aimed at expanding its reach into lower-priced segments.

The new models—internally codenamed E41 and D50—are based on the current Model Y and Model 3 platforms and are now in the validation testing stage. We believe that these models are the same standard trims of the Model Y and Model 3 that were launched in the US and European market.

According to 36Kr, production could begin in mid-2026 or later. Tesla has not commented publicly on these projects.

Source: Tesla

The simplified models will reportedly share much of their design and engineering validation with existing models, reducing development costs and accelerating time to market.

Tesla’s Shanghai Gigafactory primarily serves China and Europe, suggesting these “simplified” models are being developed for both regional markets.

On October 7, 2025, Tesla launched two Standard models in North America: a $39,990 Model Y and a $36,990 Model 3, priced roughly $5,000–5,500 lower than previous base models.

These versions removed or simplified more than 20 features—such as electric seat adjustment, laminated glass, and light bar elements—to achieve the lower price.

By October 10, the simplified Model Y also appeared on Tesla’s European websites for Norway, Germany, and Sweden, priced roughly 5,000 euros lower than before and scheduled for release in November–December 2025.

With this, Tesla has effectively introduced simplified variants across all its major global markets, except China.

Tesla China had previously developed a lower-cost Model Y through a “depop” method—reducing nonessential configurations while keeping core systems intact.

That model was postponed in favor of the Model YL, a six-seat SUV version tailored for Chinese families. Launched on August 19, 2025, the Model YL is priced at 339,000 yuan (c. $46,700) and offers a 2+2+2 seating layout, with an extended wheelbase of 150 mm.

Deliveries began on September 2, contributing to Tesla China’s record monthly sales of 71,000 units in September.

Given that the Model YL has gained traction among domestic consumers, Tesla had temporarily shelved the simplified variant. However, the new push to restart production of these stripped-down models suggests renewed urgency in boosting sales.

Conversion rate: 1 USD = 7.26 CNY as of October 13, 2025.