Amid declining sales, Tesla said it will soon offer a cheaper option for electric vehicle buyers.
The EV company announced in its latest earnings report that "a more affordable model" will go into mass production in the latter half of the year, according to Axios.
There was no indication of the name or price of the new model. Currently, the Tesla Model 3 is the cheapest car sold by the company, listed at a starting price of $42,490.
According to the Q2 earnings report, Tesla's total revenue was $22.5 billion, a 12% drop compared to one year earlier. The company's net income also declined by 16%.
While the global EV market is on the rise, Tesla sales have tumbled in recent months. Analysts have attributed much of Tesla's financial struggles to CEO Elon Musk's involvement in the Trump administration. Musk stepped down from his role with the Department of Government Efficiency in May — a move that was expected given restrictions around days of service for special government employees.
Tesla had previously lowered the price of several of its current models by thousands of dollars, according to Reuters. A new study found that used EV prices have dropped too. On average, the price of a used EV in the United States was $31,110 in May 2025.
Cheaper EV models may pique the interest of drivers looking to invest in more sustainable modes of transportation. The planet-friendly vehicles emit zero tailpipe emissions, which means less heat-trapping pollution in the atmosphere, per the U.S. Environmental Protection Agency.
EVs have a smaller carbon footprint than gas-powered cars despite the electricity needed for charging. In addition to saving hundreds on gas and maintenance, EV drivers can install solar panels at home to reduce the cost of charging.
Fueling with solar energy is more cost-effective than using public charging stations or relying on the grid. EnergySage helps consumers compare quotes from local installers and save up to $10,000 on solar installations.
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