Tesla (NASDAQ:TSLA) is preparing a cost-reduced version of its Model Y, internally codenamed E41, according to information uncovered by X user @greentheonly in recent firmware data.

The new variant is expected to remove or simplify a range of comfort and convenience features to create a more affordable option within Tesla’s most popular model line.

Source: X @greentheonly

The E41, expected to enter production later in 2025, appears positioned as an entry-level alternative to the Model Y hatchback SUV.

While Tesla has not formally announced the vehicle, the findings indicate that the company is moving toward a lower-cost Model Y to compete in a price-sensitive global EV market.

Source: X @Christopher Dungeon

According to several sightings of camouflaged coupe SUV that share the same design language as the Model Y, the E41 is expected to be smaller in size.

The Model Y has been Tesla’s best-selling vehicle worldwide, and the addition of a more affordable version would support its long-standing strategy of broadening access to electric vehicles.

Competing automakers such as BYD (HKG:1211) and XPeng (NYSE:XPEV) have already introduced budget-focused SUVs, especially in China, where price has become a decisive factor in consumer choice.

The E41 is expected to achieve cost savings by reducing or removing non-essential features. Among the planned changes are a metal roof in place of the panoramic glass roof, simplified suspension components, and basic seats with single-axis adjustment.

Exterior mirrors will be fixed rather than power-folding, while air vents will be less complex. Lighting in the cabin will be limited to essential illumination, and features such as ambient lighting and welcome lights will be stripped off.

The rear-seat entertainment display will not be offered, audio options will be reduced, and premium materials such as textile headliners will be replaced with fiberglass alternatives.

The firmware also points to standard 18-inch wheels without premium finishes and the absence of a tire pressure monitoring system.

Technically, the E41 is expected to be sold in both rear-wheel drive and all-wheel drive versions. While Tesla has not disclosed details on range, acceleration, or charging times, the data suggests that two distinct motor configurations are planned.

It is not yet known whether the E41 will support Tesla’s Full Self-Driving package or remain limited to standard Autopilot.

No official pricing has been confirmed, but analysts expect the E41 to be priced lower than the current entry-level Model Y at 263,900 yuan (c. $37,000) in China.

This would potentially position it against models in the 150,000–250,000 yuan (c. $21,000 – $35,000) range, the lower end of the market dominated by BYD, Geely and Leapmotor.

If Tesla proceeds with production in late 2025, the E41 would unquestionably become its most affordable EV to date.

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