Source: Weibo @Sugar Design

In parallel, Tesla is reportedly considering reviving its NV91 and NV93 small-vehicle projects—compact models intended to sit below the Model Y.

The NV91 project, initially envisioned as the $25,000 vehicle, was paused in February 2024 amid concerns about intense price competition from BYD (HKG:1211) and other Chinese automakers.

Source: X @tslaming

Tesla’s global sales for the first three quarters of 2025 totaled 1.2178 million vehicles, down 5.9% year over year. The simplified models could represent a key lever for regaining sales momentum.

Still, the approach carries risks. After the U.S. launch of the standard Model Y and Model 3, Tesla’s stock price fell by about 4%, wiping out approximately $65 billion in market value. Analysts caution that the cost-cutting strategy could dilute Tesla’s premium technology image built over the past decade.

In September 2025, Tesla unveiled its “Master Plan Part 4”, a strategic pivot from pure EV and energy businesses toward artificial intelligence and robotics.

The simplified vehicle initiative reflects this shift—maintaining Tesla’s advanced driver-assistance hardware while cutting comfort and decorative features to lower prices.

An even larger customer base from cheaper models could, in turn, provide Tesla with real-world driving data to further develop its Full Self-Driving (FSD) neural network for its robotaxi fleet.

However, balancing the need for automotive profitability with heavy investments in long-cycle AI and robotics projects remains Tesla’s most significant strategic challenge.