Tesla China accelerates development of lower-cost Model Y and Model 3 variants, reportedly set for 2026 production

Tesla China is accelerating development on two new vehicle projects, the E41, a stripped-down version of the Model Y, and the D50, a simplified Model 3 variant, with production expected to begin in mid-2026, according to sources. Both models will retain the current design framework but reduce costs by cutting features. The stripped-down Model Y may drop up to 18 configurations, including the panoramic glass roof and power-folding mirrors, potentially lowering its price to around RMB 200,000 ($27,500). The move aims to counter intensifying price competition from domestic brands such as BYD while also laying the groundwork for Tesla’s revived NV91 project, the long-awaited $25,000 model. The vehicles produced at Tesla’s China factory will primarily serve the domestic and European markets, a strategy that could reshape the competitive landscape of China’s mid-range EV segment. [36Kr, in Chinese]